TigerSoft - Serving All Investors since 1981. http://www.tigersoft.com/
Real-Time Peerless Stock Market Timing:
Buy and Sell Signals - 1981-2012
(C) 2012 www.tigersoft.com and William Schmidt, Ph.D.
We are always looking for ways to imrove our software. So, we do tinker with
the Buy and Sell rules when we learn something that tests well back to 1928
or even earlier. But the basic signals have remained the same since 1981,
We do back-testing of the key current market conditions nearly every night.
This and the automatic Buys and Sells are a major part of what our Nightly Hotline
offers. Each night it also shows the stocks Insider and Professionals are
buying and selling the most steadily. $350 - Order form
Our old nightly HOTLINEs and BLOGs abundantly show that REAL-TIME
. our studies of market history and our automatic Peerless Buys and Sells
have paid off time and time again for our customers. No better case was
when our October 2nd, 1987 Hotline warned that a "Crash" was coming.
The same thing occurred in early 2000 and again in July 2007. Please read
our Blog on June 24, 2007
See also TigerSoft Predictions Have Made Lots of Subscribers Bundles.
The 1929 Crash: Could It Happen Again?
There are times when aggressive Buying is
justified. Peerless identified the market bottom
Use Peerless to learn when you must get out of the market or go
by William Schmidt, Ph.D.
Here is a year-by-year review of the real-time Peerless Buys and Sells since 1981.
You will see how
The first sale of Peerless Stock Market Timing Software took place in Albuquerque in
The DJI, I found, typically trades within a band a fixed percentage above and below a key moving
average. I was the first person, I know of, to use price bands. So, I could claim that I invented them,
if anyone cares. They have become very popular. In March 1982, the DJI fell to new lows in February
and March. The P-Indicator did not confirm the price lows by making lower lows, itself. The February Buy B8
reflects that divergence. Rallies don't always start immediately. But you can see that a rally did develop
in March and April. The Sell S9 is a classic Peerless Sell. It was premature. Some are and some are not.
We have rules that tell us what to do when the signal does not work right away. The Hotline discusses them.
A new Peerless manual will, too, when it is published. Note how prices make new minor highs in April
and May 1982 with the P-Indicator not making corresponding new highs. There we call "divergences".
They tell us a to expect a decline. This concept of divergences jumped out at me from looking back
closely at the data from 1972 to 1982, the basis of the original Peerless.
In July 1982, I went to Denver to see a stock broker with Merrill Lynch who said he wanted to
buy the Peerless program. I told him of the July Sell S9s. He said I should come back the next
day and buy the software. I showed up. But he took a day off and did not buy the software.
But the signal I told him worked out. Sure enough, the DJI retreated back to the lower band.
The DJI fell just below 780 to a false new low and then quickly recovered. Our P-Indicator
had shown that it was a false decline and we should Buy. That was the Buy B8 in the chart below.
Soon afterward, word spread that interest rates would finally be dropped by the Fed. The
market took off. Note the Buy B12 and B13 signals. These were added at this time, after
back-testing for the 1970s showed that they tested well. One of the key conditions for the
Buy B12 and Buy B13 is a sudden upward explosion in trading volume. That is readily displayed
with the Peerless charts. Above all, notice how many Peerless Buys there were. This was taken
at the time to be very, very bullish. And it was. This was the start of the long upswing from
780 to 14150 in 2007.
The multitude of major Peerless Buys showed how bullish the market was at the end of
1982. This was the start of the long bull market that only ended in 2001. Each numbered
signal has its own track record. The Buy B12 is the most bullish of all the Peerless signals.
Price trendlines are easy to draw with Peerless. The Peerless manual will discuss which ones
are most reliable.
|1983 It is not unusual after a 6 months' rally for Peerless
to then give a Sell. One such signal
is only associated with a minor decline to the lower band. It's the occurrence of multiple Sells
that longer term investors must be wary of.
By January 1984, there had been 3 major Sells in 7 months. This often setups up a more
significant decline. Note how the Peerless software lets you put a vertical line on the chart to show
the key values for the specified date. Sell S9 and S12 signals are very bearish if a key support
level breaks soon after them.
See how the jump in trading volume fueled the August rally in 1984. Buy B10s tell us that the
upper price band will be exceeded.
Again, you can see how Buy B10s tell us the market is in a strong uptrend. The Buy B4
which occurs at the upper band gives the same message. Again, I emphasize that these
signals were all in the original Peerless.
In October 1985, Peerless gave a bad signal. It was soon reversed. The false S9 signal came about
because of the sudden jump in General Foods, then a component in the DJIA. It was bought out
by Phillip Morris. At the time, we warned subscribers that this was an anomally and more evidence
was needed before we would be selling. When upward momentum takes hold, especially in all-time
high territory, it best to hold tightly. The Buy B4s and B10s are usually associated with points just
before a powerful uptrend.
Peerless teaches us not to be stubborn. Sometimes a signal is wrong. Accept it and trade with
the current signal. The bulge of the P-Indicator well into positive territory is bullish.
This was a year of market swings that went beyond the normal bands. By itself, going past the
bands is not a reliable signal. Our manual will show you many important aspects of this year's
price behavior that are lessons elsewhere.
In June 1987, we had a bad Sell signal. It was soon reversed by a Buy and the DJI rose much more.
This was the year Peerless made a name for itself. It perfectly predicted the huge October decline.
It did so with multiple Sell signals on the same day. In addition, the October S9 was the third set
of such signals in 6 months. This is usually very bearish. Don't forget that. The Buy B16 was added
a few years later, when I realized that the DJI when its under duress tends to fall a certain amount.
In January 1988, I recall speaking to a large group of investors in San Diego. I told them
we had just had a series of Buy B9s. I believed the market would go substantially higher,
even though the headlines in the Wall Street Journal were about layoffs at brokerages.
This was a year of rebuilding after the October 1987 Crash. The market was on very good behavior,
moving back and forth, as it turned out, between bands 3 standard deviations away from a least squares line.
We do not use this tool. But you can play with it, using Peerless.
If there is no Peerless Sell signal after a major Buy, assume the market will still go higher. Many
Peerless reversing Buys are held for more than 6 months.
Many of our Peerless users were waiting for a new Sell S9 to buy puts and go short after a big advance.
The October 1989 Sell S9 worked well. But the DJI quickly righted itself in what we call the
"sweet spot". Buy our software and we will tell you how we define the sweet spot.
These were very good signals that we got real-time. It was so good, we ran ads in Barrons with
You will want to learn how to some chart patterns, like head and shoulders patterns. They augment
Peerless signals. 1990 was a great year. I remember relishing the ad the signal would make in Baron's,
which we ran.
The Buy B12 and B10 take-off signal made the market very profitable in January 1991. Recall how
bullish these signals had been on earlier occasions.
There were no Peerless major Sell signals. the basic trend was considered UP. But a trader using
Peerless might have drawn lines of support and resistance, as shown below. Our Peerless manual
and the TigerSoft Automatic signals will help you do this when an opportunity like this presents itself again.
In a market that is strong in a stealthy way, we so sometimes get bad Sell signals. That was
true in ,May 1993. The Sell signal was quickly reversed and the DJI went 10% higher over
the rest of the year.
The Sell S4 signal was added in 2007, because it tested so well back to 1942 and gave a number
of great signals, as it did here. At the time, I expected resistance at 4000. That was at the upper
band. And the Hotline warned of a sell-off to at least the lower band if the necklines in the
head and shoulders patterns, shown below, were broken. Greenspan raised interest rates here.
That is what spooked the market. Read my discussion of interest rate changes and stock prices.
The lower band did prove to be a good place to buy. That is ordinarily the case if there has not
been a major Sell from Peerless. Since 1994, I have discovered a number of wonderful ways to know
when a bottom is made after declines like this. The Buy B19 is one of these ways. Buy our software,
get our Hotline or buy the new Peerless manual when it comes out and you will discover a wonderful way
to call bottoms like those in April and November 1994. .Hint - seasonality usually becomes favorable
after an October sel-off in the second year of a 4 year Presidential cycle.
As the DJI made new highs in 1995, there appeared a Sell S9 when this software was running real-time.
Soon afterwards a Buy B15 appeared. Our Hotline switched to a major Buy. I remember this well
because I had to explain the reasons to traders who wanted to stay short. My new Peerless manual
will discuss the important reasons for becoming bullish here. They were to help later on, in 1999, too.
|1995 This was a tough year for some of our followers.
They could not accept that the market
could run so far in one direction. The P-Indicator was very positive and the DJI was advancing
into all-time high ground. This chart shows the need not to be stubborn. The B18 and B15
has been created earlier to allow for unusual momentum and duration of strength, as a guard
against being stubborn.
This was a great period to be long the stock market. Even the head and shoulders pattern
that the DJI developed from February to May 1996 failed to break below its neckline, after
getting new Peerless Buys. Note the failure of the rising, diagonal support line's penetration
in May 1996 to bring a decline. Peerless does not use diagonal price trends. We usually
buy on weakness near the lower band and sell on strength near the upper band.
The market in this period was easy to make money in with Peerless. The Sell S2 in August was
slightly unprofitable. But, you can see below, Peerless quickly reversed to a Buy and the market
moved much higher.
You will note that I had to add by hand the B10 in September 1997. That is because the Peerless
program needs about 100 days of data to get certain signals, and so all the signals may not appear
for the first 3 months of any given chart.
|1997 Sell S12s were relative rare as independent
signals. The top in January 1966 was called by this
signal. The P-Indicator is less important in it, than the Tiuger Accumulation Index. This signal
was added in the 1980s when we went back to 1966 in out back testing. It was not apparent
in the initial testing done with the data only between 1970 and 1981.
|1997-1998 The combination of a Sell S9/S12 usually works. See
January 1973 and October 1987 for example.
In this period of time, surpassing the normal bands proved to be a good way to judge the market's trend.
This simple approach is not advocated.
The period from March to June 1999 was unprofitable for Peerless. This was by far the
longest period in which it was not in synch with what the market was doing. The February
Sell S9 would have lost 11.6% if one had waited for the next Buy to cover short sales.
At the time, we were not so stubborn. A 7% stop loss was used then. Other factors
were bullish, which Peerless does not use. These will be explained in the forthcoming Peerless
manual. Suffice it to say here, that this was a very speculative period. Our NASDAQ
program was on a Buy. Greenspan would have been well-served to raise margin requirements
here to put a curb on the internet bubble, but chose not to, because of his ant-regulation fundamentalism.
Anyone watching the mostly negative readings from our P-Indicator should have been aware
that a bear market was approaching. But tops take a long time to form. The internet bubble
was going full force here. So many major sell signals was distinctly bearish. The Sell signals
in the first quarter of 1999 have since been eliminated. Historical back-tetsing showed us
that the first quarter of the years before the Presidential Election are never down from
1927 to 2007. That makes them bad places to employ Sell S9s and Sell S12s. Equally premature
Sell S9s and Sell S12s would have occurred in 1935 and 1967.. So, we have now changed this
part of the program.
January 2000 saw the DJI's peak before the 2001-2003 bear market. More recent testing shows
that most Sell signals should not be used in the period of the Santa Claus rally. This is based on
back-testing to 1915. The result is that the newest Peerless doe snot show Sells her euntil the
end of November.
|2000 It takes a long time for most bull markets
to reverse course. 2000 was a pivotal year. And like
many Presidential Election years was probably stabalized for political reasons by the FED. Volatility
usually expands in pivotal years. Compare this with 2007. The trading range that emerges is
broader than the bands the we use, which normally work very well. Other indexes were much
weaker in the second half of the year than the DJIA. Using DIA to trade in this environment
worked much better than SPY or QQQQ. Our Hotline will apprise you of such preferences.
Notice the many major Peerless Sell Signals without a market break. This was bearish. It set the stage
for the bear market of 2001-2003. It shows that insiders knew the market was topping out and they were selling.
This pattern was very apparent in the 1969, the 1972-1973 period, early 1974, 1980-1981 and 1987.
And in 2007-2008, as you will see.
The bearish head and shoulders patterns and multiple Sells were warnings that a bear market
was coming, even if there had been no 9/11.
We do not just use the P-Indicator as an internal strength indicator. Distribution by insiders
| can be detected in other ways, too. Look at Tiger's creation, the Accumulation Index for
this period, too. This indicator is very important.
The Buy B19 signal was created on the day of its occurrence in July 2002, after back-testing it
to 1965. Notice the many major Buys in 2002. The bear market would soon be over. But,
the bottom took 6 months to complete.
We spotted the March 2003 bottom just as it was taking place. Our new Peerless manual
will show you how we did it.
The bull market began in March 2003. See the tell-tale bulge from the P-Indicator.
Presidential Election years often have their own market patterns. Our Peerless manual will discuss them.
July's Buy B9 was only believed after the market advanced past the red moving average. I was
mislead by the head and shoulders top patterns. Very little of the rally was missed as a result.
The bigger mistake would have been made assuming that this September was going to be
weak like so many other Octobers.
The July 2007 Sell signal was very easy to spot because of Peerless. It was very profitable.
You can see how I advised using it from Blogs I wrote back then.
July 25, 2007 The Curse of Cassandra: With Peerless You Will See The Future, but Your Friends
Will Not Believe You.
August 2, 2007 A Look at Biggest Losers since major Peerless Sell S9/S12 on 7/17/2007
August 5, 2007 Don't Be A Deer in The Head Lights.
Look at How Many Valid Predictions Our Peerless System Has Made.
November 22, 2007 World Bull Market Is Ending according to Numerous Head and Shoulders' Top Patterns
The warnings of a bigger sell off appeared in many ways. You can see the many major Peerless Sells.
But the truth is that it was very easy to find stocks that looked terrible. This is usually a sign of a bear
December 30, 2007 Insider Selling at Washington Mutual and CitiGroup
Should Make Shareholders "Mad as Hell".
January 6, 2008 - Insider Selling at Bear Stearns (BSC) and How TigerSoft Spots and Trades It.
|2008-2009 The Crash of 2008-2009 took on the appearance
of DJIA declines in the 1930s more than
anything seen from 1942 to mid 2008. Spotting several tell-tale patterns, unique to the 1930s
signify this. In this extreme bearish environment, we switch to a special Mode to produce the
appropriate signals. Out Hotline discussed this at length as the decline was unfolding. Readers
seem pleased with the results.
WALL STREET RUNS THE SHOW.
A number of our TigerSoft Blogs would have helped folks avoid the Crash.:
July 13, 2008 Investing in A Perfect Financial Storm(1).
July 15, 2008 Investing in A Perfect Financial Storm(2).
July 16, 2008 Investing in A Perfect Financial Storm(3).
July 18, 2008 The SEC's Hand in The 2007-2008 Bear Market.
September 8, 2008 Why Does Treasury Secretary Paulsen Look So Frightened?
September 18, 2008 The Greenspan "De-Regulation" of Banking, by Abolishing
the Glass-Steagall Act of 1933, Has Led Directly to the 2007-2008 Bear Market.
Both Political Parties Are To Blame. Neither Admits This To Be The Central Malady.
September 19, 2008 Bush Corruption and Cronyism Reach Dizzying Heights in Paulsen's Plan