The "dumb money" and the Rydex investor are extremely bullish. Company insiders are selling to an extreme degree. In aggregate, this is a bear signal.
The price cycle is playing out as expected. Fear has given way to greed. Greed will lead to fear. Lower prices finds buyers as the selling dries up. Higher prices leads to selling as there are no more buyers. It is the price cycle - that is dictated by fear and greed - that plays over and over and over again in the markets.
Our buy signal was issued on August 19, 2010, when market participants were fearful, and with market participants bullish to an extreme degree a bear signal is being issued here. If the market hasn't topped out already, it should do so within a couple of percent of the recent highs. Rallies should be sold and stops tightened up. The market is prone to sudden sell offs. There will be better risk adjusted opportunities to buy in the future.
"Insider sales reached a four-year high as trading windows opened at hundreds of more companies and insiders showed a serious appetite for profit-taking. The number of sellers nearly doubled week-over-week and outpaced the number of buyers by a more than 4-to-1 margin. Insiders at S&P 500 companies and in the Technology sector were the most likely sellers, followed by those in the Materials and Industrial Goods sectors."