"KISS" Strategy - Says SELL!

[Relevant]

This simple chart uses a 60 day Exponential Moving Average (EMA) to trigger Buy and Sell signals in the S-Fund.

The S-Fund closed on May 14, 2018 at $50.37 and closed on May 13, 2019 at $50.55 for a whopping 12 month return of merely 0.35%.

The "KISS" strategy returned a stellar 11.4%, not to mention the nearly 1% you would have earned from Oct thru mid Jan while weathering the storm in the safe G-Fund.

I will be monitoring the 60 day EMA closely over the coming days for signs of a "whipsaw" but for now, the signal is a SELL!

Click on the link below for a larger image.
http://relevantinvestments.com/wp-conte ... S-Fund.png

[michigande]

Would you wait three closes or so below/above the indicator line to make a move or is that waiting too long at the speed with which things happen? Thanks for sharing!

[Horaenaut]

This is a beautiful chart, and I'm inclined to agree that the market is overvalued and we are in for another big drop, but so many of the charts I've been seeing only include December as the big drop predicted by their method. It just makes me wary when there aren't more examples.

I still appreciate you sharing!

EDIT: I forgot to ask what period you are using for your SMA, and what modifier you are using for your EMA--if you don't mind. Thanks!

[Relevant]

This is a beautiful chart, and I'm inclined to agree that the market is overvalued and we are in for another big drop, but so many of the charts I've been seeing only include December as the big drop predicted by their method. It just makes me wary when there aren't more examples.

I still appreciate you sharing!

EDIT: I forgot to ask what period you are using for your SMA, and what modifier you are using for your EMA--if you don't mind. Thanks!

It's a 60 day EMA on a daily chart.

[TSPKey]

Has anyone done a long-term backtest with this strategy? There are no S Fund proxies on ETRReplay.com, but the DIA (Dow) and QQQ (NASDAQ 100) underperform buy-and-hold significantly since 2003 using a 60-day EMA. And all of the major U.S. stock indices are correlated pretty tightly...
https://www.etfreplay.com/backtest_ma.aspx
Parameters:
MA length: 60 Day
MA type: Exponential
Trade On: Day of Cross
Start Date: 31-Dec-2002
End Date: 13-May-2019
First Trade: Wait for Cross

Dow: 184.1% for 60-day EMA vs. 335.4% for buy-and-hold
Nasdaq: 303.5% for 60-day EMA vs. 703.6% for buy-and-hold

[Chulke]

The problem I see with this strategy is the Time of Day the cross happens...If it doesn't cross over or under till late in the day then you have missed your transfer window to get an effective same day transfer and risk missing out on either huge gains for the next day or losing huge in the drop the next day....depending on the direction of the crossover....Just Saying!


Cheers!

[TSPKey]

The problem I see with this strategy is the Time of Day the cross happens...If it doesn't cross over or under till late in the day then you have missed your transfer window to get an effective same day transfer and risk missing out on either huge gains for the next day or losing huge in the drop the next day....depending on the direction of the crossover....Just Saying!


Cheers!

Yes, and the backtest I showed doesn't account for "next day" trading either (some software does). So the actual returns are probably worse than what I posted. Lagging indicators like moving averages almost always perform worse when you wait until the next day's close to place trades.

[wcerezo]

well, why the 60 ema day specifically? could be coincidental or simply an exercise in "curve fitting"? my point is that the 60 day establishes a correlation for the past year's movements, but likely not a causation--unless the institutional investors are all 'colluded' on the 60 day ema as the standard metric for the next couple of so cycles. who knows for sure? i dont. very few if any do.