The best part of month-end is a fresh batch of monthly charts.
We only run this review once the candlesticks are complete — and nothing in my process is more valuable.
This process forces us to take a step back and gives us no choice but to identify the direction of the primary trends, skip daily noise, and focus on what really matters.
So today, I want to bring you one of the most old school trend-following strategies JC taught me many years ago.
It’s very simple.
You take a 10-month moving average of the S&P 500, and at the end of each month, if the price closes above it, you own stocks. If it closes below, you reduce risk, or simply step aside.
That’s it.
We’re not trying to catch tops or bottoms here. This is about identifying the trend.
And right now, the message is clear.
The S&P just closed below this line for the first time since April last year.
Historically, returns tend to struggle when we’re below this line, and favor when we’re above it. Grant ran the numbers to back this up — go take a look.
As long as we’re below this level, conditions are likely to remain messy.
For the bulls, it’s simple: they need to reclaim it on a monthly closing basis. That’s when the signal triggers.
Steve and I will discuss this in more detail and go through 100+ charts tonight in our Monthly Conference Call with ASC Premium members.
