Moving Averages: Month End Preview

 |  Includes: DBC, IEF, SPY, VEU, VNQ, VTI
by: Doug Short

Here is a preview of the monthly moving averages before the market opens on the last business day of the month. All three S&P 500 monthly moving averages are giving the "invested" signal.

Note: The index updates are intended to illustrate the moving moving-average timing strategy. They also give a general sense of how US equities are behaving. However, followers of a moving average strategy should make buy/sell decisions on the signals for each specific investment, not a broad index. Even if you're investing in a fund that tracks the S&P 500 (e.g., Vanguard's VFINX or the SPY ETF) the moving average signals for the funds will occasionally differ from the underlying index because of dividend reinvestment.

The Ivy Portfolio

The top table previews the 10-month SMA timing signals for the five asset classes highlighted in The Ivy Portfolio. It should come as no surprise to anyone following my recent focus on Treasury yields that IEF, the Treasury ETF, is only one teetering on the buy/sell threshold.

I'm also included the 12-month SMA timing signals for the Ivy ETFs in response to the many requests I've received to include this slightly longer timeframe.

After the end-of-month market close, I'll update the

monthly moving average

feature with charts to illustrate.

The bottom line, as we've pointed out earlier, is that these moving-average signals have a good track record for long-term gains while avoiding major losses. They're not fool-proof, but they essentially dodged the 2007-2009 bear and thus far have captured significant gains since the initial buy signals after the March 2009 low.

Note: See the Timing Updates for interim updates throughout the month.