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The Most Important Chart to Find a Market Bottom Dear Reader, I’m keeping my focus on insider buying and selling education this week. One of the most important signals of whether you should buy or sell a stock is the activity of executives at a company. If CFOs and CEOs are buying the stock, you should not short the stock. On the other hand, if CFOs and CEOs have recently sold the stock, you should consider moving on to another buying opportunity. That comes from a study called “Do Insiders Exploit Anomalies?” It was co-written by University of Michigan professor Nejat Seyhun in 2018. It also showed that executives at companies experience the best source of alpha between the time they buy their stock and the time the markets announce the purchases. We want to replicate their success… and we’ll discuss how next week. But today, we want to center on the most important chart in finance. This can tell you when it’s time to return to the market… after a brutal sell-off. And it’s all about insider buying. Insider Buying Versus Selling The chart below comes from SECForm4.com. It’s a measurement of the dollar-for-dollar amount of buying among insiders compared to the amount of selling by insiders at any given time over the past 18 years. When the blue line is near the top of the chart, this signals SIGNIFICANT levels of insider buying. --- ![]() And when the selling levels dramatically outpace the amount of buying — at the bottom of the chart — it typically aligns with near-term market tops and blackout periods for buyers. Only pay attention to the top side of the chart. You’ll see seven periods of extreme insider buying compared to selling. Why was the buying so strong in October 2008, March 2009, August 2011, January 2016, October 2018, April 2020 and October 2022? The answer should be obvious. But… let me tell you. Crisis Brings Opportunity Every one of these events coincided with a financial crisis and a major policy shift that fueled a pivot among central banks around the globe. These events largely coincided with massive amounts of financial stimulus to rebuild the “economy.” But due to central bank efforts, the markets found a bottom. And insiders COLLECTIVELY bought every dollar of their stock possible. Don’t believe me?
So what now? Markets are in severe trouble at the moment as investors try to make sense of the recent downgrade to U.S. credit. Regardless of what happens, do yourself a favor and keep this bit of information in your back pocket. When the insiders buy… in big droves… it’s time to load up. Speaking of loading, up... Over at Tactical Wealth Investor, I’m unveiling my latest pick on Friday. I’m currently writing my monthly report — and I’m including a deep dive into the credit downgrade, updates on the U.S. oil sector, a full recap of our portfolio, and this incredible pick… We’re digging into a big opportunity for tomorrow… and I want you there. You can sign up at Tactical Wealth Investor. --- Get In, Get Out… in 24 Hours or Less In the world of trading, VERY few people can consistently pull off the “24-hour trade.” And even fewer can do it while pinpointing gains of 100% or better. It’s not because they’re bad traders… It's just that their strategy was never designed for 24-hour trades… According to options trading extraordinaire Lance Ippolito, there’s only one way to trade this current market, and that’s 24 hours at time. It has nothing to do with chart patterns, technicals, fundamentals or anything else. It has everything to do with trading ahead of headline news stories. And thankfully, that’s just what he does… Not only does he have the data and research to back that up…. He has real trade alerts to validate how well it works. Market Momentum is YELLOW Momentum is yellow ahead of the earnings reports from Apple Inc. (Nasdaq: AAPL) and Amazon.com Inc. (Nasdaq: AMZN). Expect a lot of bouncing around after the market. Also, be sure to count how many times Apple executives say “AI” during their earnings call. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. ![]() Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, click here. To download to your Android device, click here. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, click here. To download onto your MacOS, click here. Then add the TradingPub channel and you’re done: https://t.me/+9_jjnFuAvno0MjNh See you there! Garrett |
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