Guppy Multiple Moving Average - GMMA

The Guppy Multiple Moving Average, or GMMA, is a tool that shows trends among the moving averages of assets, and it has absolutely nothing to do with fish. Just so we’re clear.

“Guppy” happens to be the last name of the guy who came up with the GMMA. In a nutshell, it allows us to compare the long-term moving averages (MA) of an asset to its short-term MA. We basically overlay a graph of one on top of the other, and we use what we see to make investment decisions about that asset. If the short-term MA is moving higher than the long-term MA, it could mean the price of the asset is about to increase, and vice versa. If everyone is all gung-ho about a certain stock, but its short-term MA is crossing the long-term MA in the downward direction on our chart, that could indicate the gung-ho-ness is ending...and it’s time to sell.

Of course, the GMMA isn’t crystal ball; it can’t see into the future. All it can do is show us what’s happened in the past, both in the short-and-long-term, and allow us to use that info to guide our decisions in the future.