Trend following the UK stock market - a timing signal update

With stock markets wobbly, it's a good moment to review the trend following model I've published occasionally over the last year. There is a well-known premise that asset prices have had a tendency to trend, and stock markets are no exception.
Brief primer on trend following
One of the simplest approaches to trend following is to compare the price of an asset (like the Samp;P 500) against its average price over a certain look back period. You buy the asset when the price moves above the average, and sell when it moves below. As prices change over time, the average is known as the moving average and can be plotted against the price in most chart packages, including ours.
Below shows the Samp;P 500 versus the 200-day moving average (200d MA).

There's been a great deal of research performed on the profitability of such anapproach, with a particularly readable study by Meb Faber in "A QuantitativeApproach to Tactical Asset Management".

He showed that in US markets between 1901 and 2012, buying the Samp;P 500 whenit's above the 200d MA, and staying in cash when below both increases annualisedreturns (from 9.3% to 10.2%, and reduces downside volatility...