Here’s one for the “actions speak louder than words” file:

Massive insider selling spurs stock market concerns

(CNBC) – Corporate insiders have been selling their shares at near-record levels, and according to some, this could be a sign for outside investors to start selling as well.

Investment research firm TrimTabs reported on Wednesday that insider selling reached $7.6 billion for the month of November, the fourth-highest monthly level on record. For some this may be an alarming indicator, as corporate insiders tend to have more knowledge than public shareholders on the inner workings of the company, and what may drive stock prices up or down.

“Historically when insiders are selling heavily it’s not the greatest sign,” TrimTabs’ chief executive, David Santschi, told CNBC in a phone interview Wednesday. “I’m surprised given the valuations in the market that they’re not selling more than they are.”

According to Todd Gordon of TradingAnalysis.com, this combined with widening disparities in stock leaders and laggers could spell some short-term trouble for the market.

Why isn’t it a surprise that insiders are bailing? Because they see the reality of their businesses up close and personal. Revenues have been falling for the past year in many industries and have absolutely cratered in commodities. See the New York Times’ If it owns a well or a mine, it’s probably in trouble.

And after years of boosting reported profits with various kinds of financial engineering, corporations seem to have run out of tricks. Earnings have begun to reflect reality, and it’s not pretty:

Remove all the identifying information from this chart and the trend still screams “sell”. So the question, as noted above, isn’t why are they bailing, but what took them so long?

And remember that insiders are selling while the corporations they run continue to buy back huge numbers of shares with borrowed money. The implication? They’re supporting their stock in order to get out while the getting is good.

December 10, 2015, 6:28 AM:

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140 and profit target at 1,990, S&P 500 index)

Our intraday outlook is bearish, and our short-term outlook is bearish:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): bearish
Long-term outlook (next year): bullish

The U.S. stock market indexes gained 0.3-0.4% on Wednesday, as investors reacted to some economic data releases. Our yesterday’s bearish intraday outlook has proved accurate. The S&P 500 index extends its consolidation following October rally, as it continues to trade below resistance level of 2,100. The next important level of resistance is at around 2,130, marked by late May all-time high. On the other hand, support level is at 2,020-2,050:

Produced by McIver Capital Management

Ethan Dang, Portfolio Manager with McIver Capital Management in Vancouver.

www.McIverWealth.com

I’ve got to hand it to the majority of pundits out there. They just never learn or think for themselves. They keep dishing out the same nonsense, over and over again.

For instance, the notion that rising interest rates will kill off equity market gains, particularly in the United States … or choke off a real estate recovery … or kill the gold market for good — is a myth. Period.

It might be true if interest rates were at record highs and well above the rate of inflation. But they are not. Interest rates are at or coming off of historic record lows in many parts of the world, and there is no inflation to speak of. There is the opposite, deflation. 

That’s important to understand. As rates rise from historic low levels — many investors will run for cover. But the only market that rising interest rates will truly hurt is the value of sovereign bonds. 

Let’s consider real estate. Why would rising mortgage rates — at this point in the economic cycle and recovery — be bad for property prices?

They won’t be bad. For the simple reason that as mortgage rates rise, all the pent-up demand for property will come out of the woodwork and start buying — in anticipation of further increases in the cost of borrowed funds.

That’s just the property markets. Rising interest rates are also going to ultimately prove positive for equity markets. While equity markets in the U.S. and Europe remain vulnerable to a short-term pullback, over the long haul, rising rates will be a bullish factor.

It means the velocity of money turnover is improving, and it means increasing demand for credit — all of which are bullish fundamental forces for equities. 

Ditto for commodities. The notion that gold will simply rollover and die and that a new bull-market leg higher is impossible with rising interest rates, is nonsense.

Just consider the last big bull market in gold, from 1973 to 1980, when interest rates were soaring, as was the price of gold and most commodities. 

Sure, inflation was roaring higher then, too. But that doesn’t negate the fact that gold soared with higher interest rates. Moreover, there have been numerous other times throughout history when gold rose along with rising interest rates. 

That said, right now, most commodities still have some work to do on the downside before they bottom. But bottom they will — and they will rise again — along with rising interest rates.

Indeed, as I pen this column, gold and silver remain on target for a potential major low soon to be made or confirmed. Ditto for mining shares and platinum and palladium.

Given that we may be so close to a major low in both time and price, it’s only natural to ask if one should start aggressively buying now. 

My answer: No. Wait until I give you the final major buy signal. That’s what I am personally waiting for before I load up for my family. 

Best wishes,

Larry

P.S. Supercycle Trader is about to release a NEW bundle of recommendations! Click here to activate your membership in the wealth-building service that led members to 13 winners in 14 completed trades last month.

Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader.

Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.