Summary

Insider-sentiment data from Vickers Stock Research was solidly bullish from mid-May through mid-June. After that, the sentiment data became less meaningful as insiders were broadly prohibited from trading because of the start of earnings season. Still, the bullishness played out well as the S&P 500 has popped by more than 7% since mid-May. But August began with some stumbles for stocks, mostly the result of the surprise actions from Fitch and Moody’s rating services. Stocks retreated in response, and so too did the sentiment data from Vickers. Importantly, though, the short-term (one-week) data from Vickers’ that turned increasingly bearish did not do so to a degree (at least not yet) that significantly impacted Vickers’ long-term (eight-week) sentiment readings. By the numbers, Vickers’ sell/buy ratios are bearish when they are over 2.50. That said, we don’t start to get overly concerned until the ratios break meaningfully and sustainably above 5.00. Further, our historical analysis of this data shows that it is most actionable when the one-week and eight-week data align on several metrics. As that is not the case at the moment, we’ll put insider sentiment on our own “watch list” for now and will await insider-trading activity once earnings season is over and corporate executives, directors and beneficial owners are free to trade again.

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