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39 Week Moving Average - Does It Still Work?

There was another interesting article on Marketwatch today about the effectiveness of the old 39 week moving average as a market timing tool. You can read about it at Hulbert on the 39 Week Moving Average. The interesting thing is this was originally made popular by Doug Fabian in his old Telephone Switch Newsletter. His son, Dick Fabian, seems to have moved away from the basic tools made popular by his father, however, if you look at his track record, it seems that he would have been better served by sticking to what Dad taught him.

The 39 week average (or 200 day average) is one of those KISS (Keep It Simple Stupid) ideas that folks seem to burn a lot of energy in trying to improve. The bottom line would seem to be that the trend is your friend, and stocks are most likely to go up if they have already been going up. Following even this simple stock market timing system would have added almost 2 points to your return, while reducing the risk of your investments.

Filed under Stock Market Timing

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