TrimTabs Says Rally Is Over

Charles Biderman, the CEO of TrimTabs Investment Research, tells Yahoo’s Tech Ticker the stock market rally will soon end. He points to a massive amount of selling by company insiders and an expansion of the market’s float.

TrimTabs, which analyzes stock sales and cash flows into the market, says since May “there have been $98.5 billion of secondary stock offerings, mostly by banks, 4.6 times more than the level of new cash takeovers and buybacks. At the same time, there’s been ‘massive selling’ by insiders, to the tune of $3.9 billion vs. just $350 million of insider buying.”

Biderman said that every time since 1987 that the float of the stock market rose to these levels, the market fell sharply, with just one exception. He said most of the demand for the rally has come from under-invested hedge funds and pension funds, that he believes have completed their purchases. However, retail investors are much less enthusiastic about stocks than has been widely reported. Partly, that’s because few retail investors have the cash to put into the market.

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