Rampant Insider Selling Signals The End Of The Bubble In Stocks | Jesse Felder

When those who know companies best are unloading shares, earnings disappointments follow

Today's guest expert is the second this week to warn that US financial asset prices appear to be in bubble territory.

Is that truly the case?

And if so, will the bubble burst in 2025? Or inflate further?

Investors have much riding on the answer.

To discuss, we welcome back to the program macro analyst Jesse Felder, founder & Editor of the respected market research firm: The Felder Report.

Jesse has a number of charts of leading indicators that he walks us through that strongly suggest stock prices will head lower - perhaps a lot lower - in 2025.

This interview was recorded the day before yesterday’s big market selloff, and is highly explanative of why stock prices are so vulnerable to surprises like the Fed just delivered.

For all the details why, click here or on the video below:

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Adam’s Notes: Jesse Felder (recorded 12.17.24)

EXECUTIVE SUMMARY:

• Jesse described the financial markets as being in a bubble, citing extreme valuations and over-ownership of U.S. equities. Domestic investors have committed record-high portions of their portfolios to equities, and international investors are similarly heavily allocated. Leveraged ETFs hold assets ten times greater than their short counterparts, a stark contrast to the 5:1 ratio during the 2021 market highs. Jesse highlighted Ruchir Sharma’s description of U.S. markets as “over-owned, overvalued, and overhyped,” emphasizing that the bubble is likely in its late stages, with increased risks of a downturn.

• Market breadth has significantly deteriorated, with more than 60% of S&P 500 components declining on days when the index itself rose. Jesse compared this pattern to conditions seen during the dot-com bubble in 2000, where similar breadth weakness preceded the market’s collapse. The Nasdaq has recorded 39 Hindenburg Omens in the past year—more than double the levels seen before major corrections like the 2008 financial crisis. Jesse believes these indicators suggest weakening market participation and increasing fragility beneath the surface.

• Jesse pointed to the corporate insider sell-to-buy ratio as a major red flag, noting it has remained above 25:1 for much of the year. He explained that this level of insider selling, not seen since late 2021, strongly signals