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Welcome to edition 508 of Insider Weekends. We have been tracking insider data for nearly 10 years and in all this time we have not come across a single week where insider buying outpaced insider selling. The rapid drop in the markets over the last few weeks that saw the volatility index (VIX) jump to 75 last Thursday (the peak during the 2008-2009 Great Recession was 79) also caused insiders to start buying their own stocks at an accelerated pace.
We have been bearish for several weeks now and have written about showing restraint despite the insiders stepping up their insider buying because insiders as a group generally tend to be optimistic about their own companies, sometime buy to “signal” the market and like value investors often tend to be early. We wrote the following last week,
The Coronavirus has reached our shores and appears to be spreading across multiple states leading to several large companies including Apple (APPL), Twitter (TWTR) and Palantir asking their corporate employees or employees at West Coast offices to work from home. We are also seeing universities like Stanford and University of Washington shift classes online and there have been at least a couple of K-12 school closures in Northern California.
The markets shrugged off a 50 basis point drop in interest rates and the S&P 500 almost ended flat for the week, although with several large swings in both directions all week long.
My opinion has not changed and the next few weeks are likely to remain challenging. Futures are pointing to a very red open on Monday.