A Bit of History

For list of Major Buy & Sell Signals go to table at bottom of page


Market Forecasting is one of the most important facets of investing and will enhance your investment results and protect your capital.

Knowing when to be in the market and when to be on the sidelines, or in other asset classes, can improve your investment results by many times over the "Buy and Hold" strategy. More importantly utilizing other asset classes at the appropriate time generally means safer positioning of capital.

Being of a scientific mind, Jim Shepherd decided to do some homework to determine if major market moves in the US stock market could be predicted. That homework went on for years until he had developed such a model. You can imagine his delight when the Model successfully back tested (every major move, both up and down) over a 100-year period. It took him over 6 years to arrive at a point where he could start testing it in real time. During the early years in the eighties it gave him three signals. Since those three, it has given eight more in 'real time', that have been used with our clients, for a total of eleven clear signals on market direction since the early eighties.

The first big success was when the Model issued a sell signal 41 days prior to the 1987 crash and then reached critical mass 3 weeks prior to the crash. One of the more recent signals got our clients back into the market on September 25th 1998 (2). The market went on to gain 30% in the next few months. This signal came at a very negative time in the market when most thought that the market was finally going to crash. On October 25th 1999 (3), the Model issued a sell signal. We sold all stocks and purchased 30-year government bonds to preserve our stock market profits. These bonds have now appreciated by over 40%. 

 

NOTES ON ABOVE GRAPH:

  1. This asterisk indicates the "caution" issued in the July 10th 1998 telephone update when Jim indicated that the market would begin to move down in the near future. This was preceded by Jim's statement in the May 29, 1998 hard copy update saying, "June and into July looks very dangerous. I personally will be out of the market in June and may even be playing the downside…". On July 17th the market began its plunge that saw it go down just over 19%.
  2. On September 25th 1998, at the depths of the Asian and Russian financial crisis, when things looked the bleakest and most advisors and the media were expecting a crash, the Model issued a new "buy" signal.  Within 10 days the market began a sharp rise which took it up almost 30% (up 62% on the NASDAQ). 
  3. On October 25, 1999 the Model issued a sell signal that allowed our subscribers to lock-in huge profits of 140% from the original buy signal in early 1995. Jim recommended the purchase of 30-year government bonds for safety and future appreciation. Within two months the market began to falter and the NASDAQ collapsed in the spring of 2000. The bonds had appreciated by around 20% by the fall of 2000 when many of Wall Street's firms finally realized they should be recommending them to their clients. During the last year these treasury bonds have appreciated further, giving us a total gain of over 40%.
  4. Dec 18, 2000 Advisory. A short term rally advisory (which expired mid January 2001) limited to blue chip technology issues, certain financial and other big-cap stocks, was given within the context of an overall sell signal. The prime aim of this update was to warn those subscribers who may be short the market to cover their positions until further notice.

The following table outlines the major market moves that the Model has signaled.

 

SUMMARY OF JAS Inc.
MAJOR REAL TIME SIGNALS SINCE 1986
 

Sept 1987    SELL  Market Crashed Oct.19th

May 1988      BUY   Market rose 50% to July '90

Aug.1990      SELL  Market fell 20% in 3 months

Jan. 1991      BUY    Market rose 52% in 3 years

Mar.1994      SELL   Market fell 10% in 2 months

Jan. 1995     BUY     Market rose 140% (DOW 3838 to 9105)  to May '98 caution

May 1998    CAUTION (“we intend to step aside”)

July 1998   WARNING On telephone, 7/10 predicted down   move of May coming - market started dropping July 17 and was still down 12% in Sept when next signal issued

Sept.1998  BUY  Market rose 40% in 14 months to Oct '99

Oct.1999    SELL  Sell Equities Buy Long Term US Government 30 Year T  Bonds

Dec.2000   Advisory On Dec. 18th a Short-Term rally advisory was issued specifically noting that the rally would be limited to blue chip technology issues, certain financials and other big-cap stocks only. NOTE this was done within the time frame of the overall sell signal in place at that time. The prime aim of the update was to warn subscribers who may be short the market to cover their positions until further notice. (This advisory was terminated in Mid-January)

Fall of 2001:  Bond investments up over 40%, and awaiting new asset allocation to take advantage of Model's next signal.

Our subscribers are currently awaiting the next signal from the Model. This signal could either be an indication that the Model has reached critical mass ( an imminent crash signal) or a new buy signal. Details of the next signal will not be made public until at least 6 to 8 weeks after it is relayed to our subscribers.

 

 

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This page last edited
November 13, 2001