The S&P 500 bouncing around the 200-day moving average, which may signal downside risk is increasing. In moments like these, investors don’t need predictions. They need a process.  

What does it mean when the S&P 500 Index falls below the 200 day moving average? 

According to the most recent AAII Investor Sentiment Survey, over 50% of investors now believe there’s a higher-than-typical chance of a recession.



That’s not surprising. I've been banging the table for months about the rising risks. But only now, after the S&P 500 has sold off roughly 10% from its peak to trough, are investors and the media suddenly catching on. This past week alone, I saw several posts outlining so-called “roadmaps to recession.” Cue the fear machine: markets down, recession headlines up, and every move by the Fed or policymakers being dissected like gospel.

But here’s the truth: it’s mostly noise.

What matters isn’t the speculation. it’s whether you have a system to manage risk. And right now, one signal stands out more than the rest.

What does this signal tells us? 



On March 10, the S&P 500 index broke below its 200-day simple moving average, a widely followed technical level that separates longer-term uptrends from downtrends.

This line isn’t magic. But it’s meaningful. It helps strip emotion out of the equation and gives investors an objective view of the market’s current trajectory. When the index is above it, we’re generally in an uptrend. When its below, risk increases, volatility picks up, and drawdowns become more likely.

These moves can be a little messy, often with multiple bounces below and above the line as volatility increases and the market attempts to find meaningful direction

In fact, since 1989, 91 of the S&P 500’s 100 most extreme days, both positive and negative, occurred while the index was below the 200-day moving average. That’s not opinion. That’s data.

And that’s why it matters right now.

The "Time in the Market" Crowd Is Missing the Point

Whenever markets get rocky, we tend to hear the same refrain: “It’s about time in the market, not timing the market.”

It sounds comforting, and in many ways, it’s true, you can’t reliably predict every top or bottom. But that’s not the point.

The real goal is not to time markets perfectly, it’s to manage risk when the environment changes.

Here’s what most people overlook: if you had avoided both the best and worst 50 days in the S&P 500 since 1989, your long-term performance would’ve actually improved compared to buying and holding.



How is that possible?

Because the most extreme days, up or down, cluster around volatile, trendless, high-risk periods. And those periods often occur below the 200-day moving average.

This isn’t about trading. It’s about tilting the odds in your favor with a framework that adapts as conditions change.

So, What Do We Actually Do With The Information about the S&P 500 Index?

At SYKON Capital, we believe in adjusting risk exposure as market conditions shift.

That doesn’t mean panic selling or going to cash. It means proactively reallocating, shifting exposure toward areas that may offer a better balance of return and downside protection.

Sometimes that means tilting into lower-volatility strategies. Other times, it’s about reducing position size or emphasizing defensive sectors.

Because the truth is:

Investing isn’t binary. It’s not all in or all out. It’s shades of gray.

And no, this isn’t market timing. It’s thoughtful, data-driven risk management.

If You’re Not a Client, Ask This Simple Question

If we’re not managing your portfolio, now’s the time to ask your advisor one important question:

What steps have you taken to manage risk since the S&P 500 fell below its 200-day moving average? And what is the plan if it stays below or rises back above this line?

And please, don’t settle for “the market always comes back” as an answer.

Yes, the market may come back eventually. But your goals, your timeline, and your peace of mind matter today.

A Reminder from the Past



After the dot-com bubble burst, the Nasdaq fell 75% and took 15 years to fully recover.

No one knows if we’re on the edge of something like that again. This isn’t a prediction. But it’s a reminder:

Blind optimism is not a strategy.

Process is.

Where Does The S&P500 Index Go From Here?

The current environment calls for discipline, not guesswork. That’s why we use tools like the 200-day moving average as part of a repeatable, objective process to help guide decisions, whether markets are trending higher or breaking down.

Because “buy and hope” isn’t a strategy.

Data, discipline, and objectivity are.

And if your current plan doesn’t include a framework for adapting to changing conditions, it may be time for a conversation.