Trend Following Strategies in Treasury Bonds | Japanese Markets

In this post, we look at how the Japanese stock market has predicted the trend in US Treasury bonds pretty well. Does it work? Yes, it seems to work pretty well, but this is not a strategy we trade or recommend.

We made the following trading rules:

When Japanese stocks are above their 150 day moving average, go long TLT (US long-term Treasuries). When the average is below the 150-day average, stay out.

We use the ETF with ticker code EWJ as a proxy for Japanese stocks.

No matter what, the performance has been pretty good over the last 20 years (logarithmic chart shown below)

You can find more info about this trading strategy here:
https://www.quantifiedstrategies.com/trend-following-treasuries/

#TreasuryBonds #TrendFollowing #JapaneseStockMarket #USMarkets #TradingStrategy #QuantitativeTrading #EWJ #150DayMovingAverage