50/200 SMA golden cross on DIA — Published Backtest & Verdict

The cross never lost a trade in seven years, and it sat in cash through the COVID crash entirely (the first entry did not come until 2020-07-30, months after the bottom). But it also missed the first leg of every recovery and sat in cash 25% of a long bull market: it lost 34.2 points to buy-and-hold (+81.0% vs +115.2%) to save 20.7 points of drawdown (-16.0% vs -36.7%). On the Dow, the golden cross bought a smoother ride, not a bigger one. A 100% win rate across only 3 trades is a small sample, not a law. No costs modeled; 3 round trips of real costs would trim the result slightly. Kinship disclosed: the trend / moving-average-timing family was published before on QQQ (golden cross, MACD) and SPY (Faber 10-month) — DIA is a fresh ticker for the family (queue refill item, added 2026-10-25).

• Total return: +81.0% (trailed buy-and-hold at +115.2%)
• CAGR: +8.8% vs +11.5% buy-and-hold
• Max drawdown: -16.0% vs -36.7% buy-and-hold
• Win rate: 100% over 3 trades
• Period: 2019-10-16 to 2026-11-06 (DIA), published 2026-11-11

Cost assumption: slippage and commissions aren't modeled — fills are assumed at the exact closing price with no trading fees, the same assumption stated on How We Backtest. Real execution will differ, usually for the worse.

The claim on trial

The golden cross — the 50-day average crossing above the 200-day — is a reliable buy signal that beats buy-and-hold on the Dow.

The exact rules

• Buy DIA at the close when the 50-day SMA crosses above the 200-day SMA (golden cross); sell at the close when the 50-day SMA crosses below the 200-day SMA (death cross). Long DIA while the 50-day is above the 200-day, cash otherwise.
• Signals evaluated only when the current AND previous bars both have fully formed 50/200 SMAs (200-day warmup; strategy window starts at bar 199, 2019-10-16). Entry at a signal close starts earning the next bar (no look-ahead); an exit retains the exit bar's return. An open position at the end is marked at the final close.
• Long only, fully invested when in, cash earns 0%. No transaction costs, no taxes modeled (disclosed).

Our honest verdict

The cross never lost a trade (3 trades, 100% win rate) and sat out the COVID crash entirely, but it lost 34.2 points to buy-and-hold (+81.0% vs +115.2%) to save 20.7 points of drawdown (-16.0% vs -36.7%), sitting in cash 25% of the period and missing the first leg of every recovery. On the Dow the golden cross bought a smoother ride, not a bigger one; n=3 is a small sample, not a law.

Full trade log on Substack · Original X thread · StratIQ track record · All published backtests

Charted on TradingView (affiliate link — we may earn a commission at no extra cost to you): tradingview.com

Not financial advice — research and education only; do your own due diligence.