Last week provided the start of another leg down in what has been an unpredictable stock market, and the market now appears to be in the midst of forming another bear flag. Since rolling over and selling off strongly in late April, the market has demonstrated all sorts of conflicting formations that have confounded trend traders and investors.
That’s why at Sabrient we prefer an absolute return long/short approach that is indifferent to market direction, relying upon our fundamentals-based quant models to create relative rankings among stocks for identifying the best longs and shorts for a given portfolio, no matter what direction the market takes. Nevertheless, for long-only traders or those who use our quant rankings to create watch lists for swing trades based on technical entries and exits, an indication of where the charts are indicating the overall stock market might be headed can be helpful.
So, as we enter the final week of summer, I’d like to review the various chart patterns that we’ve seen since the market peaked in mid-April, and take a stab at where the charts are telling us the market might go from here. I’ll focus on the widely traded SPDR Trust exchange-traded fund (SPY), which tracks the broad S&P 500 Index. Read more…
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As I reported last month, January saw relatively limited insider trading in the wake of some year-end net profit-taking in December. So, it was encouraging to see the buyers return during February. Nevertheless, weekly net insider trading transactions (the number of individual buyers minus sellers) still finished February quite negatively, as a lot of insiders appeared to be selling into a resurgent market. Is it indicating some doubt about the sustainability of market strength? Let’s dig a bit deeper into the numbers.
Rather than look at the total dollars traded—which typically runs strongly to the sell side—at Sabrient we prefer to add up the number of unique insider buyers during the week minus the number of insider sellers, as reported to the SEC on Form 4 – open market transactions. In essence, we look at each buyer or seller as casting a “vote” on their company stock, which we have found can be insightful. Read more…
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After selling into year-end market strength to close out the year, net weekly net insider trading transactions (the number of individual buyers minus sellers) has finished January on a slightly positive note, as many insiders appear to have taken advantage of the market weakness to increase their net holdings.
One of the data items that Sabrient tracks is Net Insider Transactions. Rather than look at the total dollars traded—which continues to run strongly to the sell side—we prefer to add up the number of unique insider purchasers during the week minus the number of insider sellers, as reported to the SEC on Form 4 – open market transactions. In essence, we look at each buyer or seller as casting a “vote” on their company stock, which we have found can be quite meaningful. Read more…
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Two exchange-traded funds that track Sabrient quantitative indexes passed their 3-year anniversaries in late 2009 and received prestigious 4-STAR Morningstar ratings.
The Claymore/Sabrient Insider ETF (NYSE Arca: NFO) and the Claymore/Sabrient Defensive Equity ETF (NYSE Arca: DEF) track the Sabrient Insider Sentiment Index (SBRIN) and Sabrient Defensive Equity Index (SBRDE), respectively.
Here is a performance snapshot of each: Read more…
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Last month, it appeared that net insider trading transactions (the number of individual buyers minus sellers) was breaking out to the upside. It was certainly acting as a leading indicator for the end-of-year rally. Updating this for the week ending December 31, it appears that insiders have been looking to sell into market strength. Is this an indication that insiders are losing confidence in their company stock to make much more upside from these levels? Read more…
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Last month, I posted that net insider trading transactions had turned positive for the first time since May. Updating this for the week ending November 27, it appears that optimistic insiders again outnumber pessimistic ones.
Sabrient’s research team compiles a wide variety of useful data for internal reference and for use within our quantitative models. One of the things that we track is Net Insider Transactions. We simply add up the number of unique insider purchases during the week minus the number of insider sales, as reported to the SEC on Form 4 – open market transactions. Read more…
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Sabrient’s research team posts a wide variety of useful data for internal reference, and much of it is used within our quantitative models and client deliverables. One of the things that we track is Net Insider Transactions.
It appears that for the first time since late May, the market has seen positive net Insider Buying, as of October 30. (I tweeted about this last week.) We are simply adding up the number of unique insider purchases during the week minus the number of insider sales, as reported to the SEC on Form 4 – open market transactions. Read more…
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You’ve heard it before: trading today’s stock market can be hazardous to both your wealth and health. The market can go up fast…and it can fall even faster. In such an environment, many sophisticated investors and portfolio managers turn to “absolute return” strategies that seek to make money no matter where the market goes.
But this concept can be intimidating to experienced and newbie traders alike. Let me demystify the concept and show how any investor can incorporate an absolute return approach—no matter what their experience level or account size. Read more…
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by Scott Martindale, Senior Managing Director
Scott Martindale
Today the market sold off a bit, but the Sabrient Investor’s (H)Edge long/short absolute return portfolio was up +2.3%, and gained +3.8% vs. its market benchmark. This is the great value of an absolute return strategy that helps you sleep better at night.
For the first several months of the year, the portfolio was outperforming its benchmark whether the market was going up or down. It was the best of all worlds. Read more…
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by Scott Martindale, Senior Managing Director
Scott Martindale
I’d like to follow up on my prior post about UNG dropping below $9 and looking like a good long-term investment. It appears that the fund has filed with the SEC to resume creation of shares by the end of September, which would likely impact the current 15%+ premium to its NAV. ETFs aren’t supposed to trade at a significant premium or discount to NAV (like CEFs do) because of their ability to create or redeem shares “on the fly.” So, when that ability to create shares is resumed, this artificially-induced premium should go away, possibly taking down shares prices by as much as 15%.
Don Dion wrote about this early this morning and thought it would hit UNG shares hard:
http://www.thestreet.com/story/10597817/1/dion-investor-alert–ung-shares-to-slide.html?cm_ven=GOOGLEFI
Instead, UNG is up another 3% to near $11, lagging a bit behind natural gas futures which were up about 12% to about $3.30. Any correction to the premium might possibly bring shares down below $10, so if you are a short-term trader and got in after my prior post when it dipped below $9, you might consider locking in some profit. Nevertheless, thinking long-term, natural gas is a valuable commodity and clean fuel source that won’t stay down forever. Perhaps that’s what investors are thinking even today.
– Scott Martindale
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