Customer Service 1 (888) 261-2693
Advanced Search

The Best Time to Trade Cash for Stocks

By Brian Heyliger
Monday, January 12, 2009

Here's a simple fact of the market: You won't know when the bottom has hit until long after it has already past. By that time, you may have missed the best opportunities to buy.
 
But we can watch for clues...
 
That's why I keep an eye on a group of the market's smartest players: corporate insiders. Insiders can do more than just tell us the direction of individual stocks. They can help us predict the market's general direction.
 
Usually, market bottoms coincide with peaks in insider buying. Insiders step up the buying as the market falls. Then, as the market recovers, insiders back off because the bargains start to disappear. This creates a peak in insider buying just as the market carves out a bottom. Take a look at the peak in buying we got at the end of November:
 
Insider Buy Ratio 
 
 
The market tried to carve out a bottom twice in 2008: first with a five-year low of 837 on the S&P 500 in October, and again in November, when it fell to 741. Insider buying continued through November, as the market grew cheaper.
 
Once December rolled around, and the market started climbing, the buying began to slow. The Insider Buy Ratio (IBR), which I use to measure how bullish or bearish insiders are, fell from a peak of 69% to 52%.
 
Historically, similar peaks in insider buying have cemented that bottom. The market is moving higher from here on out. You should now own less cash and more stocks than you've owned during any other time in the last five years.
 
Don't let this opportunity to buy stocks pass. Before you know it, the market will be 200 points higher, the bottom long gone, and you'll have wished you'd listened to the insiders.
 
Good investing,
 
Brian Heyliger




Recent Articles
Market Notes
For-profit educators Apollo Group and Corinthian Colleges hit new highs.
 
Major homebuilder Lennar falls 20% on fraud accusation.
 
Oil continues to drop back down toward lows.
 
Earnings today... Alcoa.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1221.53 +1.3% +10.1%
Oil 38.31 +1.4% -0.6%
Gold 138.07 +2.1% +16.3%
Silver 28.60 +2.4% +53.6%
US-Dollar 80.67 -0.8% +8.1%
Euro 1.32 +0.6% -12.1%
Volatility 18.01 -7.1% -19.8%
Gold Stocks 581.56 +3.0% +17.0%
10-Year Yield 3.02 +0.7% -10.7%

World ETFs
Symbol Price
Change
52-Wk
USA 122.89 +0.3% +11.3%
Canada 30.50 +0.2% +16.2%
Russia 21.94 +1.4% +18.1%
India 37.85 +0.3% +22.3%
Israel 16.69 +1.3% +10.8%
Japan 10.64 +0.6% +6.5%
Singapore 13.73 -1.1% +18.8%
Taiwan 14.78 +0.4% +19.2%
S. Korea 57.31 +1.3% +23.4%
S. Africa 71.87 +1.4% +28.2%
China 44.42 -1.4% -0.6%
Lat.America 53.17 +0.7% +8.4%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 137.59 +1.0% +18.9%
Big Pharma 64.14 +0.0% -3.2%
Internet 72.07 -0.1% +23.4%
Semis 16.22 +1.2% +29.4%
Utilities 31.28 +0.2% +1.5%
Defense 18.52 +0.1% +10.6%
Nanotech 10.03 +0.4% +1.6%
Alt. Energy 10.08 +1.3% -3.3%
Water 18.49 +1.0% +14.5%
Insurance 16.14 +0.4% +21.1%
Biotech 20.54 -0.2% +28.1%
Retail 19.70 +0.3% +30.2%
Software 24.79 +0.8% +25.9%
Big Tech 53.87 +0.3% +22.7%
Construction 13.10 +0.9% +15.7%
Media 13.64 +0.5% +26.0%
Consumer Svcs 67.39 +0.2% +24.5%
Financials 55.04 +0.3% +7.4%
Health Care 64.30 +0.1% +2.0%
Industrials 63.54 +0.5% +21.0%
Basic Mat 74.35 +1.1% +25.3%
Real Estate 55.32 +0.1% +25.0%
Transportation 91.77 +0.7% +26.9%
Telecom 22.59 +0.5% +17.8%