One somewhat hidden technical indicator that a lot of investing experts keep an eye on is the amount of selling being engaged in by corporate insiders. Insiders must disclose any trading they are doing in the company's stock, of course, which makes it possible to track the ratio of the amount of shares being bought by insiders to those being sold. The idea is that these insiders must know, as well as anyone does, the true state of their businesses and the economy.
And recently, the ratio has been moving in the wrong direction. By the end of February, the sell-to-buy ratio stood at 6.56 to 1. A month earlier, at the end of January, it was at 5.77 to 1. Back in October 2011, the ratio dropped below even, with more insiders buying their stocks than selling them.
The insiders certainly knew what they were doing in October, since the Dow Jones industrial average has risen by about 25 percent since then. It remains to be seen whether the current insider outlook reflects the state of the market now - where the Dow has stubbornly refused to surge past the 13,000 mark in recent weeks - or is an indicator of where we're still headed.
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