SPY 200MA Band Timer (Sadek) — Tactical Asset Allocation Strategy

Asymmetric-band trend timer on SPY, originally identified at a trading-group meeting in the mid-2000s and validated in live use for over two decades by Bill Sadek. Designed to fully participate in advancing markets while stepping aside from sustained drawdowns. Its infrequent trading cadence (approximately one round-trip every 2.5 years in historical data) also yields better-than-average tax efficiency, since most holding periods qualify for long-term capital gains treatment. The 200-day simple moving average (SMA) defines the band center. A 3-day SMA of SPY close acts as the price proxy. Bands are set at +3% (upper) and -5% (lower) around the 200 SMA. When the 3-day crosses above the upper band, the portfolio moves to 100% SPY; when it crosses below the lower band, it moves to 100% cash (BIL). Positions are held between the bands, so corrections down to 5% below the 200 SMA are treated as noise rather than a signal — this is what produces the low turnover. The asymmetric thresholds (+3% up / -5% down) encode the premise that downside breaks are more reliable than upside breakouts, so the strategy requires a deeper move below trend to trigger an exit than it requires above trend to trigger an entry. The extra distance on the downside filters out normal pullbacks that would otherwise cause whipsaws.