From the bottom of the tech bubble bear market (2003) to today this table tells us how often the S&P 500 has been below its 200-Day Moving Average. The maximum pop, maximum drop and fixed forward returns are shown for 1, 3, 6 and 12 months. These are based on the first date the index goes below its 200-Day moving average.

https://www.zeelotes.org/SP500_Below_200DMA.PNG

Twenty out of the twenty-eight (71%) cases see a drop from the first day below of less than five percent. Just 21% (six cases) see a drop of ten percent or more, and just two exceed 20% - 2007-2009 and 2020. So this is a very blunt tool to say the least!

Today I entered SOXL at 10:26 AM with a price of $19.02 and exited at 12:05 PM with a price of $20.42 resulting in a gain of 7.36% in less than two hours. You can either join the lemmings and run for the hills in the face of volatility or take advantage of it. I choose the latter over the former.

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