The market may finally be peaking.

Price action worries me some -- I had expected a bigger rally after good earnings reports from Citigroup (NYSE:C), General Electric (NYSE:GE), and Google (NASDAQ:GOOG) -- but insider action, or lack thereof, worries me more.

Executives aren't buying like they used to. Data from Form 4 Oracle shows that nearly 65% of public companies were reporting net insider buying (purchases minus sales) as of the beginning of March. Today, less than 50% are net buyers.

Look at Goldman Sachs (NYSE:GS). There's been no real action since January, when board member Stephen Friedman bought 15,300 shares at $66 a share. He's now sitting on close to a double. Yet it seems he should be sitting on more; Goldman reported a 100% earnings beat last quarter.

Many bankers have stopped buying. Jackie Ward, a Bank of America (NYSE:BAC) insider, last bought shares in February. Jamie Dimon, CEO of JPMorgan Chase (NYSE:JPM), last bought shares in January. But his purchase wasn't the last insider transaction at the bank. Board member James Stanley sold close to 12,000 shares in early February.

Do these insiders know something that we don't?

Profiting from panic
Two months ago, as most investors panicked over proposed "stress tests" for big banks, insiders piled into the market.

Steve Luczo, CEO of Seagate (NYSE:STX), at the time committed more than $2 million to a turnaround plan that is already bearing fruit. Higher volume sales and cost controls should help the disk drive maker earn at least 7% gross margins for the quarter, better than earlier estimates, according to a preliminary earnings report management released this week.

Shares of Seagate are up more than 40% since Luczo's big bet. Today's tepid buying suggests to me that insiders aren't as enthusiastic about April's market as they were about February's or March's.

Yet they could have other reasons. Even rich executives have limits; big bets from earlier this year could have left many tapped out and unable to buy more. It's equally possible that some insiders feel exposed. Too many have used margin to pad their positions. Why risk losing more than they already have?

A marginal opportunity
That would make sense, and it could explain this week's lack of bullish insider action. What we're getting instead is baby buying -- executives risking comparatively little to load up on shares that could triple overnight, because they trade for pennies on the dollar. It's a field of soon-to-be-broken dreams for hucksters and speculators.

Or at least, that seems to be the consensus among experts. Teun Draaisma of Morgan Stanley points out that the average duration of downturns has been 43 months. We're only 28 months into the current crisis as of this writing. Plus, U.S. house prices have never bottomed when unemployment is still rising. No wonder some investors remain bearish.

"As I see it, cash is probably the best thing to own right now," wrote one highly rated Motley Fool CAPS investor yesterday in a blog post about the impact of deflation. "Even the best blue chip stocks won't do too well for the LTBH [long-term buy-and-hold] investor over the next few years. The current rally is, in this light, one of the biggest headfakes/sucker rallies yet, possibly worse than the Nov-Jan rally."

Some of our Foolish economic analysts agree. "This is almost certainly a bear market rally built on hope and dreams, rather than an objective assessment of the present situation," writes colleague Alex Dumortier.

He further points out that questions remain about the effectiveness of the PPIP, which is supposed to allow banks to shed toxic assets. "As far as I'm concerned, it's more of a concept at this stage than a road-tested solution to the problem," he says.

Risky business
I hope he's wrong. I hope I'm wrong about the insiders. And yet there's no doubt that because of the federal government's various economic stimuli -- from the TARP to the stimulus and every well-intentioned step taken in between -- it's harder to know the real price of risk today than it was before these steps were taken. Obscure the price of risk and you complicate the science of stock valuation.

Do insiders feel obscured? They sure are acting like it.

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Tim had stock and options positions in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy, like a good GM worker, is wearing its rally cap.