On the surface, July was a good month in the markets.  It sparked my curiosity about what insiders are doing.  Do their actions show that they see a sustained recovery coming?

Insider Buying Has Dried Up Since May.

Insider buying and selling behavior offers a unique insight on the prospects of a company, industry, economic sector, or even the stock market in general. By definition, Insiders have a deep knowledge and understanding of the company, exclusive information on the company's performance and prospects … and if they are risking their own money on the stock, you might expect that they have good reasons, especially when several insiders buy or sell at the same time.

Well, since May, Insiders have certainly changed their buying habits. Here is a chart from Insidercow showing how bearish insiders are right now.

Another sign I've been watching has been the performance of China.

China's Shanghai Index Has Some Room to Move.

China's Shanghai Index has been in a downtrend for a while. It has under-performed most of the major world markets recently. However, in early July it bounced nicely off the downtrend channel. At this point, it is sitting right at the resistance zone. A sustained move above the 2700 level will likely give the index plenty of room to rally. On the other hand, a failure at this level could send a signal to other world markets.

This next chart shows a weekly view of gold. This is a market that I don't pay close attention to, normally. Nonetheless, its chart caught my eye this weekend.

Decision Time for Gold.

The price of Gold is sitting at the bottom of the up-channel.  So, this where you'd expect to see buying come in from those expecting the up-trend to continue in Gold.  The chart speaks for itself.

We'll see what happens.  Hope you have a good week.

It was a strong week for the markets.  Normally, to get a sense of what's happening, I focus on the U.S. equity markets.  This week, however, I thought it made sense to start with a look at emerging markets around the world.  These markets are often referred to as BRICs.

Emerging Markets Lead Stock Rally.

At this point, foreign stocks are leading the U.S. stock market higher. Here is a chart showing that Emerging Market iShares recently broke above its June high.  Moreover, after breaking above the down-trend since April, it successfully re-tested that line (from above) and bounced higher. From a technical analysis perspective, those are bullish signs.

 

Here in America, it is earnings season, and companies have been reporting better news than most expected.  The economic news hasn't been stellar; but the markets have held up well.  This chart shows the S&P 500 Index at the top of hotly contested resistance level.

Many would take a sustained move above the 1120 level as a strong bullish sign.

With that said, business expansion is dragging and slowing the economic recovery, and it
seems everyone is searching for reasons.

Debt Overhang.

In his new paper, Federal Reserve Bank of Cleveland researcher Filippo Occhino says a contributing factor may be something called debt overhang. Simply put, when companies have too much debt it discourages them and their investors from taking on projects because the debt consumes any profits the investors might make, even in situations when the investment raises equity in the company.

Watch the Debt Overhang Video from the Cleveland Fed.

It was a strong week for the markets.  Normally, to get a sense of what's happening, I focus on the U.S. equity markets.  This week, however, I thought it made sense to start with a look at emerging markets around the world.  These markets are often referred to as BRICs.

Emerging Markets Lead Stock Rally.

At this point, foreign stocks are leading the U.S. stock market higher. Here is a chart showing that Emerging Market iShares recently broke above its June high.  Moreover, after breaking above the down-trend since April, it successfully re-tested that line (from above) and bounced higher. From a technical analysis perspective, those are bullish signs.

 

Here in America, it is earnings season, and companies have been reporting better news than most expected.  The economic news hasn't been stellar; but the markets have held up well.  This chart shows the S&P 500 Index at the top of hotly contested resistance level.

Many would take a sustained move above the 1120 level as a strong bullish sign.

With that said, business expansion is dragging and slowing the economic recovery, and it
seems everyone is searching for reasons.

Debt Overhang.

In his new paper, Federal Reserve Bank of Cleveland researcher Filippo Occhino says a contributing factor may be something called debt overhang. Simply put, when companies have too much debt it discourages them and their investors from taking on projects because the debt consumes any profits the investors might make, even in situations when the investment raises equity in the company.

Watch the Debt Overhang Video from the Cleveland Fed.