Stocks and Bonds: The 200-Day Moving Average Divide
Over the ten years between March 2016 and March 2026, the S&P 500—represented by the SPY ETF—spent only 15.6% of the time below its 200-day moving average by more than 1%: 394 trading sessions out of 2,520. For the remaining 84.4% of the time, price stayed above that level, often by a margin exceeding 5%. The 200-day moving average is, for U.S. equities, a structural anchor: not a magical line, but the level that separates phases of orderly expansion from periods of stress.
For the 7–10 year Treasury ETF, which we use as a proxy for the U.S. aggregate bond market through the IEF ETF, the picture is radically different. Sessions below the threshold totaled 794 out of 2,519, equal to 31.5% of the time—more than one day out of three. The 200-day SMA does not serve as the same kind of floor for bonds as it does for equities. Bonds can remain below their moving average for months or even years, driven by interest rate cycles that move slowly and lack the same reversal tendency that characterizes equities.
This asymmetry is the most important starting point for interpreting any technical signal involving both asset classes.
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