A Defensive Strategy That Works
A big theme in my writing -- at TheStreet.com and on my blog -- has been taking defensive action amid unhealthy demand for equities. There are several ways to measure this. I prefer taking defensive action when the S&P 500 goes below its 200-day moving average, then getting fully invested when it goes back above that point.
As Ken Fisher has said many times, the market can only do four things: go up a lot, go up a little, go down a little or go down a lot. My use of the 200-day moving average is to try to miss as much as possible of that last one. The attached chart shows a way that might help mitigate the full brunt of a bear market. It compares the S&P 500 (with its 200-day moving average in blue) and the CBOE BuyWrite Index(BXM Quote).| Taking Defensive Action |
![]() |
| Click here for larger image. |
| Source: BigCharts.com |
- Loading Comments...
- Loading Comments...
Recent Comments
Featured Photo Galleries
| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
|---|---|---|---|---|
| 10,318.16 | 1,091.38 | 2,146.04 | 33.56 |
Oil *
77.53
|
|
DOWN
14.28
|
DOWN
3.52
|
DOWN
10.78
|
UP
0.07
|
10 Yr
3.36%
SPDR Gold
112.94
|
|
-0.14%
|
-0.32%
|
-0.50%
|
+0.21%
|
Data delayed 20 minutes |















