The 200-Day Line
TimingOn the first trading day of each month, look at SPY versus its 200-day simple moving average. If SPY closed ABOVE its 200-day average, hold SPY for the month; if BELOW, sit in cash (0% return) for the month. Benchmark is SPY buy and hold.
See this in the terminal — live earnings bands, fair value and rates.
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Stepping out below the 200-day average feels prudent. It mostly just sold you out of the recovery.
The rule. On the first trading day of each month, look at SPY versus its 200-day simple moving average. If SPY closed ABOVE its 200-day average, hold SPY for the month; if BELOW, sit in cash (0% return) for the month. Benchmark is SPY buy and hold.
What actually happened.
- $10,000 became $41,727. The same $10,000 in Buy and hold (SPY) became $84,528. This strategy trailed the benchmark by $42,802.
- Compounded at 10.0% a year vs 15.3% for the benchmark.
- Best year: 2013 (+32%). Worst year: 2022 (-21%). This is not a smooth ride.
The catch. At its worst, this strategy fell -26% from a prior peak — shallower than the benchmark's -34%. Would you have held through that? Most people don't. That's the whole game.
The takeaway. The lesson isn't "this idea is stupid." It's that the simple, boring benchmark is harder to beat than the pitch decks admit. Before you try to be clever, respect the index.
Drawdown from prior peak
Calendar-year returns
| Line | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 200-day timing (SPY/cash) | 0% | +16% | +32% | +13% | -4% | +11% | +22% | -6% | +10% | +15% | +29% | -21% | +9% | +25% | +12% | +2% |
| Buy and hold (SPY) | +8% | +16% | +32% | +13% | +1% | +12% | +22% | -5% | +31% | +18% | +29% | -18% | +26% | +25% | +18% | +13% |
Cash earns 0% here; real cash would earn short-term interest, helping the strategy in high-rate stretches. Signals are read at each prior month-end, so there is no look-ahead. How we test
Rebalance: monthly check (in above the 200-day MA, cash below) · Window: 2011-09-02 → 2026-09-02 · Last run Sep 2, 2026 · JSON