Post #2501 by rayvt on the Mechanical Investing board

Investment Strategies / Mechanical Investing

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"We are still above the 10 month SMA of the S&P 500"
Right, but the slopes of the SMA's are falling,

From Yahoo just now, the DJIA
Day's Range	41,435.20 - 41,734.00
52 Week Range	32,327.20 - 41,734.00

I could be wrong, but I don't think bear markets generally start when the market is printing new all-time highs.
BWDIK

"bear markets start slowly"
might(!?) be in the making.

The point was that there is plenty of time to get out of a bear market before it takes the final plunge.
You don't even need to be on a hair trigger with the 10 month (200 day or 42 week) SMA. My backtest shows that staying invested until there has been 4 consecutive week of S&P500 below the SMA is fine.

Your timing strategy is fine if it gets you out at a 15% loss before the deep 40% loss.
That's all you need. You don't want one that takes you out at a 10% loss just before a 20% gain.

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