More often than not, corporate insiders know far more about the health of the economy than the average investor. Presumably, it's because they have access to high level sales numbers, customer sentiment, inventory levels, and a whole host of information that is not easy to come by. When confidence abounds, business is doing well, and customers are satisfied, insiders buy. When things are looking bleak, insiders sell. So what are insiders doing right now? They're selling. Big time.

According to Charles Biderman, CEO of TrimTabs, an independent research firm, the average insider selling ratio, that is, number of sellers divided by the number of buyers, is around 7. That means there are typically 7 times more sellers than buyers on any given day. There are a number of reasons the number is so high, one being that many employees are paid in stock, and sell immediately when the stock vests, but that's not really all that important.

What is important is that the average is 7, and that in November of 2008, before the panic sell-off, the number had spiked to 24. What's even more important is that right now, that number is 30. Insiders are selling off more than they did just two months after Lehman Brothers collapsed. We were still looking into the abyss at that point.

Even though I am bearish on the overall economy for the next few quarters, I was shocked to see such a high ratio of insider selling. It's probably time to start taking profits off the table and moving towards a more conservative portfolio, with a large swath in cash.