Zeev's Turnips Patch-No Politics (ZEEV)

[metsin2]

dell dumped 10 million shares last week?lol.lol.Monday, August 25, 2003

WHAT TO WATCH
Is the Market Too High?

A stream of positive economic news in recent weeks has spurred gains in the stock market, with both the NASDAQ and the Dow Jones Industrial Average reaching highs for the year. But the actions of some corporate executives suggest rough times may lie ahead.
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Corporate insiders, executives who are acutely aware of their companies' performance, are selling their company stocks in droves, and experts say that is something worth noting. Insider trading has traditionally been a forecaster of the direction the market will take, says Jack Adamo, president of the weekly Internet newsletter Insiders Plus.

For three and a half consecutive months, executives have been selling their stock at volumes seen only once in the last decade, according to Thomson Financial, a financial services company that tracks insider trading. During the year following the last such stretch, from July to September 2000, the broad Standard & Poor's 500 index declined 28 percent.

"The market is overvalued from every standpoint," Adamo said. "What the insiders are telling us is that we'd rather have the cash than the stock. This is a very simple inequality."

While insider trading done outside government regulation often makes headlines, the type that Adamo and others in his field track garners less public notice and is perfectly legal. Companies must submit filings to the Securities and Exchange Commission that identify officials who have access to information before the general public does. Those officials, once formally identified as "insiders," are then required to inform the S.E.C. whenever they buy or sell shares of their companies' stock - information that is made public. To prevent profiteering, the rules prohibit such transactions in periods before earnings are released.

David Coleman, the editor of Vickers Weekly Insider, said his examination of recent insider trading patterns leads him to expects a 20 percent correction in the stock market in the next six months or so. "At best, the markets are plateauing," he said.
http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=4686888&tid=dell&sid=468...