Algokid

Avoiding Bear Markets with Market Timing Model

BATS:SPY   SPDR S&P 500 ETF
700 10 2
The "SP 100 above 200" model( see here: https://www.tradingview.com/v/PZF8GX3a/) proved to be a excellent method to get in and most importantly get out of the market.

Another model that can be use by investors is the Market Timing Model. I like this model for the following reason

- Simple
- Requires very little homework
- Profitable
- Avoid bear markets
- Did I mentioned it was simple ?

Rules

- Open a monthly Chart of SPY             or other ETFs
- place a 10 month SMA
- BUY if PRICE > SMA AT THE END OF THE MONTH
- SELL if PRICE < SMA AT THE END OF THE MONTH

That's it !! But here's the catch , you need to find a good selection of ETFs for this strategy to be successful. Start with the following : SPY             , IEF             , GLD             .

This is perfect for long term investors, who don't have time to look at their portfolio every day, or week. I strongly recommend that you read the "IVY PORTFOLIO" by Mebane Faber for more detail. Hope this help.
www.passivestor.com
Algokid PRO
4 years ago
The biggest cons of the strategy:

- Draw-down can be an issue ( for the spy since 2002 MAX DD has been ~ 6 %, low)
- Need to wait till the end of the month to either go in or out of the trade. This could be problematic for some traders. Could use the "SP 100 above 200" mode with this model to find better entries and exits.

This required a lot of patience and discipline. As you can see , trades can last from 1 months to well over 3 years. It's important that you sit on your hands and follow the system. That is the only way you will be profitable with this.
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dimes
4 years ago
That is pretty cool thanks for the info ill track the progress. And definitely read the recommended reading.
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Algokid PRO
4 years ago
2 more trading days for this month, SPY long is still good ( unless something catastrophic happens over the next 48 hours). return since Jan 31st ' 2012 is currently at 6.61 % .
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Algokid PRO
4 years ago
quick update : trade still open , return is 11.27 % since jan 2012.
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Algokid PRO
3 years ago
we are approaching the end of the month and the trade is still open on SPY. up 9% so far .
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