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Bear Signals Aren’t Sell Signals—They’re Opportunities
A quick reminder—just because our signals flash bearish doesn’t mean it’s time to hit the panic button and sell everything. A bear signal simply means lower prices are likely coming—and that’s exactly what happened last week. We’ve said this before, and we’ll keep saying it: a well-timed bear signal isn’t just about risk management; it’s about opportunity. For longer-term investors, this is where patience pays off. Instead of chasing at higher prices, you get the chance to bid lower, often with more liquidity coming into play. It’s also great to see a steady flow of activity returning to the IPO market. After months of low issuance, a more consistent pace is a welcome development. While we’ve used our signaling process internally for years, we’ve only recently begun sharing our work. With increased IPO activity, we now have more opportunities to illustrate our signals in action.
How Our Signals Work Each of our signals incorporates IPO-specific elements—such as offering size, premium, and open auction volume—factors that specialists understand well. We've developed predictive analytics using these inputs to enhance our signals:
These signals work together to balance risk and reward. By incorporating predictive analytics, they provide a structured way to manage exposure—alerting traders when further declines are likely through Bear 1 and Bear 2 signals. For those who have trialed our platform, our back-tests demonstrate how these signals perform when applied with a disciplined strategy:
The results using this structured approach speak for themselves. However, it’s important to note that our signals can be incorporated into other investment strategies as well.
Bear Signals in Action Last week’s action was a perfect example. The signals pointed to a pullback, and sure enough, that’s what we got. Instead of fearing that, the best investors see it as a second chance—a way to get positioned at a better price. As we publish trading recaps, we encourage you to observe the patterns:
Smart investing isn’t about reacting—it’s about preparing. Keep watching the signals, stay patient, and use the data to your advantage.
– The Prophet’s Perspective
Sionna Therapeutics: A Case Study Sion Therapeutics (SION) last week did not receive a Bull Signal prior to the open. However, within the first 20 minutes of trading, it triggered two Bear Signals—which preceded a nearly 15% decline in price. For investors with a long-term bullish view on SION, this was an opportunity. Rather than chasing at the open, our signals highlighted a more tactical entry point—helping to avoid unnecessary downside and position for a potential rebound.
IPO Prophet’s value lies in our proprietary signaling process. We analyze Initial Public Offerings using a suite of algorithms refined over the past 20 years. The table above highlights all IPOs in 2024 where IPO Prophet has generated a Bull Signal, demonstrating returns based on our signals and subsequent performance since the opening trade. While our indicators can be applied to longer-term positions, the data above reflects only the first day’s performance, as our signals are designed specifically for issuance day, with positions marked to market at the close of the IPO’s first trading day. To learn more about our process, here.
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