Saturday, April 25, 2009
Surprise, surprise2...
(not really). This bloomberg.com link describes how corporate insiders are selling their stock at an alarming pace on this bear market rally (sales outnumbered purchases 8:1 in the first 3 weeks of April). Confirmation that this is a sucker's/bear market rally wasn't necessary, as the fundamentals and technicals support this concept, but this is absolute confirmation that we are going much lower in general stocks.
The topping process could potentially last until the end of May but all of the risk right now is to the downside IMO if one is looking at the intermediate to long term (anything can happen in a single day or week, of course). Go short almost any stock sector (be careful if you're shorting gold miners, though, and I remain long Gold royalty company RGLD) if you have a horizon of at least 3 months and you should do well. If you're not comfortable going short, sell equities and move to cash (i.e. Gold or U.S. paper Dollars) or short-term U.S. Federal government bonds (avoid corporate and municipal/state bonds).