Overbought Market

Hi

Been following our recent rally. It looks and feels great to see my portfolio worth a lot more every time I look at it. Makes me want to look at it a lot more.

However, if you look at the PE ratio of the S&P 500, it's way over valued. 20+ times operating earnings. The historical average is 16. The full article can on the S&P PE valuation can be found here.

I've been keeping close watch on corporate insider sales over the last few months. Corp insider sales have outstripped buys by a lot. Insiders are selling in large amount way larger than insiders are buying. I don't have the figures as to how many times the insiders are selling over buying. But just read the insider trades page on Barrons and you'll see what I mean. It's been this way for a while.

These two key facts lead me to believe we are in an overbought market. It's simply too good to be true. It can't go on forever. I've started to move into cash.