8-Month SMA-Strategy: Upward trend on world stock markets broken


We are viewing a market over 8 months and then work with an 8-monthly Moving Average (SMA). Every end of the month we watch whether the market we are observing is trading above or below this SMA. If it is trading above, then we can stay invested or buy more. If the market is trading below then we propose to sell and – stay out.

As you can see, this simple strategy works in many different markets, especially the Asian stock markets

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8-Month SMA-Strategy: Upward Trend on world stock markets broken

Last month I wrote: “July promises some excitement whether bulls or bears will win the upper hand on world stock markets”. And in deed July held what it promised. Investors saw volatile markets searching for their direction. Finally the bears succeeded and sent the world stock index, S&P 500 and also German DAX downwards through the 8-Month SMA trend line for the first time since September 2010.

Singapore was the only market with a positive month thus switching its signal from red to green. And with this, Asia remains the last region where the 8-Month SMA does not yet signal a negative trend. Let’s see next month, whether this can last.

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