x
0

Weekly Comic: Market insiders selling at the top to retail investors. Is the crash near?

Stock MarketsFeb 23, 2017 09:06AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Investing.com - Optimism about U.S. President Donald Trump's pro-growth economic agenda has lifted U.S. equities to record high territory, with the Dow marking its ninth straight record close on Wednesday.

Overall, U.S. stocks are now up almost 15% since the election, boosted by Trump's promises of tax reform, infrastructure spending and bank regulation.

The tremendously high valuations has led to some hedge funds to bet that the rally is coming to an end, as enthusiasm over Trump's policies is overdone and political risk in Europe isn't priced in.

The level of shorts - a bet that a stock will fall - taken out against the Dow Jones Industrial Average jumped 13% in the 30 days to February 20.

In addition, the first seven weeks of this year have seen insiders selling 5.5-times as many shares as they bought, meaning that insiders are dumping shares at an aggressive pace.

This comes at a time when retail investors are jumping into the market looking to make some quick gains.

Trump has been credited with being a major catalyst behind Wall Street's impressive rally since election day, with some dubbing it the "Trump Jump", as investors welcomed his promises of tax reform, infrastructure spending and deregulation.

However, recent gains have led to speculation of a near-term reversal with some fund manager likening the current stock market euphoria to the dotcom bubble, which reached a peak on the last day of 1999 and then burst dramatically.

The question remains, who or what will be the cause of the reversal.

To see more of Investing.com’s weekly comics, visit: http://www.investing.com/analysis/comics

Weekly Comic: Market insiders selling at the top to retail investors. Is the crash near?
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
Brian Zane
Brian Zane Feb 23, 2017 11:52PM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The entire market is rigged and over valued, time to run bail before the crash.
Roman Shapochuk
Roman Shapochuk Feb 23, 2017 5:55PM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The market is overheated
Luca Iannaccone
Luca Iannaccone Feb 23, 2017 3:31PM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
every really the same question pop up, now the dotcom bubble: the expansion that began in March 1992 ended in March 2001, the nasdaq went up about 400% reaching as high as 5000 points, the last leg was around 80% increase in a few month with feds raising rates 5 time , now in November 2016 before the election we were at the same level as DECEMBER 2014 we have gone nowhere during 2 years ,we finally had a 3 month rally with a 15 % increase with the fed still unable to raise rates and this to you look like the dotcom bubble?? On top of this high increase in short position it is often a signe of a rally in the opposite direction because any little good news will make the short cover their position creating a quick move up..Reality is ,as always, nobody knows the future! we are due for a correction and we could be going down tomorrow or it could be next year, but comparing a 3 month 15% really to the dotcom bubble it is non sense it is miss information and it just there to scare people...
Lara Kiri
Lara Kiri Feb 23, 2017 6:59PM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You compare 400% on 9 years on the Nasdaq and 15% on 3 months on the DJ ! But if you compare the last 9 years on the DJ, increase is more than 300%. So yes, we can conclude there is a bubble too.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
 
 
 
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.