Better re-entry signal during large corrections other than SPY crossing back above the 200-day moving average?
Hello all,
I currently follow a 200-day moving average strategy using SPY as the signal and UPRO as the trading vehicle. Overall, I think it’s a strong strategy, but I’m wondering whether anyone has backtested a better re-entry rule than simply waiting for SPY to cross back above its 200-day moving average.
My main concern is that the 200 DMA crossover can miss a lot of upside after major bear markets. For example, during the 2007–2009 bear market, SPY bottomed in the 60s, but the 200 DMA re-entry signal did not trigger until SPY was already back in the 90s.
So my question is: has anyone found a systematic, backtested approach for re-entering earlier after large bear markets, especially declines of 30% or more, without relying on pure guessing? I’m mainly interested in rules that have been backtest to show they are better than waiting for the standard 200 DMA cross.