Buy Sell Signals

Note 1 The "Caution" The Shepherd Investment Strategist issued on July 10, 1998

From time to time Jim will advise of a 'caution' in the market. This is based on technical and historical work. It is not to be deemed to be as reliable as the model generated signals. It should be pointed out here that going into the spring of 1998 in the May 31, 1998 hard copy update Jim informed subscribers that he personally was exiting the market. This was based on technical and historical work.

On the 10th of July, even though no signal was issued, based on the model's readings and Jim's other work he was able to reiterate that the market was topping.

The move down that followed was exacerbated by "news" events of the President's Lewinsky indiscretions and the Russian insolvency. The model's readings and Jim's other work indicated a probable down move of approximately 5%. How were we to know that the darker side of the president's private life was going to be reported on at that time? As to Russia's insolvency, we had written about this earlier - a few things came to light and the news media decided to blow it up at that time. The "news" reporting on these two events helped to make what would have been a moderate down market become more serious than 'our numbers' indicated that it should have been. That unfortunately is the way with "news" events such as that involving the president at that time. They are unpredictable and can effect the market, even if it is only for relatively short periods.

Note 2 The "Buy" of late September 1998

Some have asked, "...how can you have a 'buy' without a "sell" in-between?" The model looks at where the internals are, and 'reports'. When it gives off a "number" beyond a predetermined level either on the upside or downside this is deemed as a 'signal' upon which to act. Thus we could have more than one 'sell' in a row or as in the case of late in the summer of 1998, a second 'buy' that followed the previous one of the Spring on 1995. The model helps to clarify at a time when there may be confusion as was the case late in the summer of 1998.

Note 3 'Sell' of October 25, 1999.

The 'sell' signal given by the model at this date indicated that the market was exrtremely dangerous. Initially we appeared to have a top in the S&P on Dec 30, 1999 (which was exceeded only by a few points later, really indicating a double top) and a top on a closing basis and Jan 14, 2000 for the DJIA. It is our contention that the roll over began at that time. The amount of time that the market is safe to be in and make good returns far outweighs staying in after the receipt of a sell signal. Persons remaining in this market at this time are simply gambling that they will be able to get out before the other person. Our customers were advised at the time of the 'sell' signal of where to place their funds, and have made a good return on same in a safe environment, preserving capital until the next safe opportunity on the upside. We are aware of the apparent track record of the NASDAQ, but we remind you that this is mostly driven by a very few stock to its present overblown extremes, while most others are down. More recently the NASDAQ, which continued up, as driven by only a handful of stock that were seen to be havens of safety as money moved out of the 'lesser' stock, finally allowed the true reflection of what had been happening internally to the NASDAQ for months as it begin to erode in early April. The remainder of the US market will soon follow. If there were to be a change, other than what the model has indicated to date, then the model will again be a good lead indicator.

PLEASE NOTE: The above information is updated with some delay in respect to our paying customers.

 

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This page last edited
March 23, 2001