Insiders are Selling at a Record Pace:
What Do They Know About Corporate Earnings in 2011?

Congratulations to Cisco insiders who sold 6,620,750 shares of Cisco, or 60% of their holdings over the last 6 months. Cisco was crushed on Thursday, falling over 15 percent on the opening. It pays to know what really is happening on the inside of a company.

It is also worthy to note in spite of the Fed's QE2 program, last week's corporate insider selling of all stocks (not just S&P) hit an all-time record of $4.5 billion.

So why is so-called smart money unloading their stocks even when the Fed is pumping billions into the stock market?

"Insider selling at Standard & Poor's 500 Index companies reached a record in the past week as executives took advantage of a two-year high in the stock-market to sell their shares."

Honestly, why aren't these corporate insiders buying stocks, with interest rates at zero and the Fed pouring billions of dollars of stimulus at the economy? How smart is selling stocks and bonds to move into a cash position that pays no returns at all?

What do corporate insiders know about their corporate earnings coming up in 2011 that we don't know? Haven't we been told there is no chance of a double-dip recession? Meanwhile, from a contrarian perspective, so called "less informed" money or small investors have rarely been this bullish.

Sentiment readings are literally off the charts this week with the AAII small investor bullish sentiment survey surging 9% to 57.6%. This is the highest bullish sentiment has been since January 18, 2007. The historical average is 39%.

think this reading is rather distorted now given what the Fed has done but the real question is will the primary dealers jump all over this?

We are at a key pivot point with oil prices at $90 a barrel. A break above this key resistance will set in motion a number of critical events as will a sharp break down.

The long contract high for Thursday touched $90 before backing off. Commodity prices are correcting as expected, so we'll see what is developing and what opportunities emerge here.