I came upon a very interesting piece earlier today from Mark Hulbert over at Marketwatch.com. He points out that the latest data from the Vickers Weekly Insider Report shows the highest level of insider selling relative to buying in almost two years. Last week the insider selling outpaced insider buying by a level of 4.16 to 1, an amazingly high number compared to most weeks. Since one week’s amount of data is so volatile most like to go by the eight week average, which stands at 2.69 to 1, the highest since November of 2007. Those of you who follow the market closely at all will remember that late 2007 is when the market reached its all-time high, only to enter a severe bear market not too long afterwards.

It’s difficult to say exactly what has caused the extreme bearishness among insiders in the last few weeks, but it certainly is something that should concern bulls in the stock market. While it is definitely true that insiders don’t always predict the market accurately or on time, levels that are this high are quite unusual. The bearish argument here will probably say that insiders are seeing through this current rally and understanding that things are not going well in the economy at all. On the other hand the bulls will likely say that insiders are lightening up because the market has done so well and there is little to be concerned about.

Insider selling is not necessarily a sign that you should clear out of the stock market altogether, but it is definitely something to think about when considering how much of your hard earned money you have invested in the market. Do these insiders know something about the state of the economy and what is to come? Only time will tell, but this data needs to make you at least consider lightening up on some of your stock positions for the time being.