Courtesy of Doug Short.
Here is an early preview of the monthly moving averages I routinely update on last business day of the month. With the strong performance of the US markets thus far in October, I’ve received several requests for an early preview, so here it is — with five market days (including today) before the month end.
Thus far in the month of October, the S&P 500 is up 10.85%. All of the ETFs in the Ivy Portfolio are giving the same signals as at the end of last month, but the prices have gotten closer to signal points, especially for anyone tracking the 12-month alternate strategy.
The S&P 500 index, which I use to illustrate the monthly moving average concept, is likewise close to a signal for the 12-month moving average, and the 10-month exponential moving average (EMA), which weights the more recent data points in the series, would trigger a buy as the current price.
For a sense of how quickly the tables have turned, so to speak, click here to see the September month-end signals.
The basic monthly-moving-average strategy, one that focuses exclusively on the relationship of price to the moving average, ignores signals during the month. But in months like the current one, a major rally incites our curiosity.
The bottom line, as I’ve illustrated elsewhere, is that these moving-average signals have a good track record for long-term gains while reducing the odds of major losses. They’re not fool-proof, but they essentially dodged the 2007-2009 bear and thus far have captured significant gains since the initial buy signals after the March 2009 low.
Note: See the Timing Updates for interim updates throughout the month.
