Insiders sending an ominous market signal

Increased buybacks and insider selling a negative signal?

The recent jump in stock prices has one important group of disbelievers.

Corporate insiders have been dumping shares at the highest pace in 4½ years, according to market data firm TrimTabs. The selling averaged $450 million a day in November, the highest since May 2011.

That has come in a month when the benchmark index has gained about 0.9 percent and is coming off its best week of the year, registering a 3.3 percent jump. Insider behavior, though, is often seen as a reliable indicator of underlying market strength, raising concern about the durability of a rally that began in October, tailed off in early November, but has come back strongly of late.

"Talk about crosscurrents," said Jim Paulsen, chief market strategist at Wells Capital Management. "The insider selling is a real negative signal for the market typically."

Read More These high-risk strategies also offer high rewards

One of the primary reasons it hasn't pulled the market down is a push from companies buying back their own shares. Corporate buying, including cash takeovers and new buybacks, hit $96.2 billion in November. Since third-quarter earnings began in October, buybacks have averaged $3.9 billion a day, which TrimTabs said is the second-highest pace since the bull market began in March 2009.