As the stock market teeters on the edge of euphoria, insiders are cashing out at a frenetic pace

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The stock market rollercoaster just hit another wild loop, and it’s sending shivers down investors’ spines. Let’s break it down: the top 10 stocks in the S&P 500 now carry more weight than ever before, comprising a whopping 33% of the index’s value. That’s right, the big guns are calling the shots like never before.

And if that’s not enough to make you clutch your pearls, consider this: the market cap of these giants compared to the rest of the pack is a staggering 700 times higher than the 75th percentile. We’re talking record-breaking numbers reminiscent of the tumultuous times of the early 1930s.

But wait, there’s more. Brace yourselves for a jaw-dropping revelation: US households are going all-in on stocks, allocating a whopping 48% of their financial assets to the market, according to the financial wizards at Goldman Sachs. And guess what’s leading the charge? Tech stocks, soaring to dizzying heights never seen before, even surpassing the heady days of the Dot-com bubble.

But here’s where things take a dramatic turn. While retail investors are diving headfirst into the frenzy, corporate insiders are hitting the eject button at lightning speed. The ratio of insider selling to buying has skyrocketed to levels not seen since Q1 2021, painting a stark picture of insiders cashing out while the getting’s good.

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And speaking of cashing out, Amazon’s top brass is leading the charge, with founder Jeff Bezos offloading a cool 50 million shares worth a jaw-dropping $8.5 billion in February alone. Not to be outdone, Amazon’s CEO Andy Jassy joined the party, selling a tidy sum of $21.1 million worth of shares.

So what’s the takeaway from all this? Well, as seasoned investor Dave Collum puts it, when the Fed starts cutting rates, it might be time to hit the brakes instead of hitting the buy button.

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