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Postcards from the florida republic
An independent and profitable state of mind.
As you know, I love to follow insider buying activity – and the momentum it generates.
When we talk about insiders buying stocks, we’re focused on the CEOs, CFOs, and the “10%-owners” in the organization, among others.
Historically, executives who buy their own stocks enjoy a very significant winning percentage in the first year of ownership.
But there’s another group of “insider” buyers. In fact, they’re the ultimate insiders.
Let me show you one of the top “Insider” plays of the year… that should only frustrate and confuse us. Why?
Because the trade was by a sitting member of the Senate Financial Committee.
What’s more, it was technically a bet against the U.S. stock market.
Thomas Carper is an Incredible Momentum Trader
On July 13, 2023, Senator Thomas Carper (D-DE) took a bearish position on the Nasdaq 100. He took two positions in the ProShares Short QQQ ETF (PSQ), according to a new filing disclosure at CongressTrading.
His stakes were between $1,000 to $15,000. Now, PSQ is an ETF that provides inverse exposure to the Nasdaq-100 index. Carper also sold U.S. Treasury Bills ranging between $15,000 to $50,000 and $50,000 to $100,000 in two different deals.
And what a well-timed hedge it was! This aligned perfectly with the top-of-the-market rally – and what appears to be the longest positive momentum run of 2023.
Naturally, this is all just coincidence, right? It’s just a coincidence that he sold U.S. Treasuries and bought an inverse ETF that bets against non-financial U.S. stocks…
Sure, he happens to be a member of the Finance Committee and serves as the Chairman of the Subcommittee on International Trade, Customs, and Global Competitiveness… but what does one thing have to do with the other, really?
Just coincidence. Nothing to see here.
Was it also a coincidence that China said on July 14 that it was watching accelerated “monetary policy tightening” worldwide?
Did that hedge coincide with this chart? We’ll find out soon enough.
Momentum is yellow right now, and the Consumer Price Index prints tomorrow. Already, we’ve seen some bets that the Fed funds rate will push up to the 6% threshold.
A surprise (higher) CPI figure, say, on the back of rising energy prices, would be bearish for Treasuries… and bearish for technology stocks.
Let’s see if Senator Carper knows something everyone else doesn’t.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.