200 Day Moving Average Followers Bullish

By on March 18, 2010

Mark Hulbert reports on the success of those who use the 200 day moving average as a market timing device. Buying when the market is above its 200 day moving average and selling when it falls below it appears to be a pretty good recipe for risk-adjusted market success. According to Hulbert, it worked well for Doug Fabian until he started tinkering with the simple formula.

Hulbert concludes:

What does the 200-day moving average market timing system say about stocks currently? It says we should be fully invested, since the market is comfortably above its average level of the last 200 days. In fact, the market remained above that average even at the bottom of its January-February correction, and subsequent market strength appears to be increasingly vindicating its decision to remain bullish.

Source: Yahoo Finance

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