WINDERMERE, Fla. ( Stockpickr) -- For the week ending May 6, insider selling at S&P 500 companies outpaced insider buying by a rather large ratio of 565 to 1. This is a continuation of a trend we have seen since the Federal Reserve started its quantitative easing program, with corporate insiders taking advantage of strength in equity prices and selling off large chunks of their stock holdings.
According to a weekly report out of Bloomberg, the total amount of insider selling was $650.4 million, and the total amount of insider buying was just $1.2 million. Once again, I would like to point that the market has not cared about this huge difference in the amount of selling to buying by insiders at the largest companies in the world.
Shorting the U.S. equities market when these ratios started to show up in favor of the bears would have lost you money. Even worse, you would have missed out on many stocks that uptrended and returned big profits. This is why I stress that market headlines do not trump an overall trend in stock prices. The trend is always what matters most -- not your opinion based off of the news. If the market wants to go up despite the heavy insider selling, then it's foolish not to ride the wave higher.
Related: 5 Technical Trades for TuesdayNobody gets paid to be right. Traders and investors get paid to be on the right side of the trend. It never fails to baffle me how so many people will fight trends in the markets. This happens because they have lost the psychological battle of controlling their emotions. You must remain completely unemotional when trading. Your mindset shouldn't change, whether you're making or losing money, as long as you have strict money management policy in place. Keep losses small, and let winners run. Nobody gets rich making a stand in equities markets. No matter how bearish the news is, or what you might feel about it, you have to take what the market gives you. Remember, often the market loves to climb a "wall of worry" and trend higher as the media fills the headlines with fear-based sensationalism. This doesn't mean we can't get situations where stocks to go down when headlines are bearish. It just means that before you place your bets, always make sure you have identified if there is an uptrend, downtrend or sideways trend in the markets. Here's a look at a number of stocks with the most notable insider activity.