The FOMC Dip Capture

A mean-reversion model that buys QQQ on the market's fear — triggered by SPY's reaction on Federal Reserve decision days.

≈4

Qualified signals per year — only down-Fed days

84%

Win rate at the 3-month hold (backtest, 2014–26)

+18%

Annualized, QQQ dip vs +14% SPY buy & hold

The Thesis

The Federal Reserve decides rates eight times a year. On those days the market trades on emotion, not fundamentals — and it sells fear. The FOMC Dip Capture is a rules-based model that takes the other side in QQQ: it buys at the close whenever the broad market (SPY) closes down on a decision day, then lets time — not hope — unwind the panic. No discretion. No chart-gazing. One signal, repeated for over a decade.

The Signal

The trigger is SPY's own reaction to the statement. When the index closes lower on a scheduled FOMC day, a signal is qualified and a QQQ position is opened at that close; up days are ignored. This single filter turns eight noisy events a year into a small set of high-quality, fear-driven entries. The model does not forecast the Fed — it simply fades the market's worst emotional hours, where QQQ's higher beta gives the snap-back the most room to run.

The Vehicle

The signal is read from SPY; the position is taken in QQQ — the higher-beta expression of the same mean reversion. Nothing else. No leverage, no second instrument. One signal, one trade, one vehicle.

Page 2 · Strategy & Performance

How It Behaves

Time-based exits. Positions are held for a defined window and closed mechanically — no trailing stops, no target-chasing.
Patience compounds. The edge strengthens the longer the hold; short holds are tactical, long holds are the core book.
Higher beta, higher edge. QQQ's larger mean-reversion amplitude gives the dip a bigger snap-back than the broad index — the same fear, amplified.
Low frequency by design. ~4 entries a year means the model spends most of its time waiting — and that is the point.

QQQ Dip vs SPY Buy & Hold — 2014–2026

Strategy	Win Rate	Ann. Return	Max Drawdown	% Time In
QQQ Dip · 1 week	59%	+2%	−11%	8%
QQQ Dip · 1 month	72%	+10%	−21%	33%
QQQ Dip · 3 months (Core)	84%	+18%	−29%	77%
QQQ buy & hold (benchmark)	—	+19%	−35%	100%
SPY buy & hold (benchmark)	—	+14%	−34%	100%

Strategy = buy QQQ at the close on SPY FOMC down-days. Backtest window 2014–2026. Past performance is not indicative of future results.

Equity — Growth of $100,000, 2014–2026

Growth of a $100,000 stake — the 3-month FOMC Dip book (teal) tracks QQQ (amber) and clearly beats SPY (slate) buy-&-hold over 2014–2026, with far less time exposed to the market.

The Read

At the 3-month hold the QQQ dip's +18% annualized lands just shy of QQQ's own +19% buy-and-hold — but it gets there with an 84% win rate, a smaller drawdown (−29% vs −35%), and only 77% of the time in the market. Against SPY buy-and-hold (+14%) it clearly leads. The shorter holds trail the benchmarks but do so with a fraction of the time exposure. The trade-off is explicit: patience is what converts a down-Fed-day into an edge.

For Whom

Built for systematic and private-account capital that can commit to a low-frequency, contrarian posture in QQQ. Not a day trade. Not a hedge against a thesis. A standing order to buy the market's fear on the days it is most afraid.

Backtested results reflect historical data and do not guarantee future performance. This document is educational and is not investment advice. Signal is derived from SPY's reaction to scheduled FOMC decisions; execution is in QQQ with model-defined holding windows. Full engine and interactive dashboard available on request.

FOMC Dip Capture (QQQ)

Contact: @nishantpatel9 · Confidential