If You Want To Time The Market, Ignore Moving Averages

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Moving average trading strategies emphasize what's already happened in the rear view mirror. That's no way to drive your portfolio, especially in 2019.

The indicators vary. A common feature, though, is provocative terminology. For instance, headlines about a 'Death Cross' in the market will tend to stir more interest among casual market watchers compared to stories about Fed policy.

The author adds this important caveat:"Sure, there are false positives too: Occasions when the market fell below its 200-day moving average, and then quickly rebounded. That occurred briefly in November 2014 and in August 2016." Studying the past helps form a smart strategy. Yet shrewd investors also remember to play the game in front of them. Market dynamics change over time, which means strategies must also adapt.

Another factor that's changed is the degree to which companies buyback shares. The biggest pool of equity buyers since 2009 isn't retail or institutional investors. It's the companies themselves. Firms buying their own shares have provided a steady bid during market selloffs, helping to curtail declines and extend the bull market.

 

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I respectfully disagree. Moving averages are part of the arsenal of indicators used to trade stocks. Trading must be learned using a number of confirming indicators, not just one. I would not rule out moving averages.

No you shouldn’t because those basic signals are the tools PPT uses to fool the retail traders.

StockBoardAsset MSM teaching people to ignore market downturn and learn to lose money.😂

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