MDY / SPY — Mid-Cap Leadership Study
Two ideas · Idea 1: MDY new ATH while SPY lags (n=85) · Idea 2: ratio reclaims 65d MA + thrust (n=18) · Both live now · Data through August 31, 2026 · Updated August 31, 2026 · 6:31 PM ET
Idea 1 Events
85
MDY ATH · SPY below high
Idea 1 · 12m Ratio
-2.3%
30% win — FADES
Idea 2 Events
18
literal n=2 · this is the tradeable read
Idea 2 · 12m Ratio
+6.3%
65% win — persists
Regime Flag
2021–24
every thrust signal lost
Live Now
Both
MDY ATH Aug 12 · thrust Jun 10
Live Trade Tracker — the current thrust laid over every historical instance
Each faint line is one of the 18 historical relative-thrust signals (Idea 2), indexed to entry (green = MDY/SPY ratio higher 60 sessions later, red = lower); the dashed line is the analog median. The bold line is the live thrust (long MDY / short SPY), from the Jun 10, 2026 signal. As of day 56, the ratio is -3.3%, running BEHIND the analog median of +0.9% at the same point. The cohort median lands near +0.6% by day 60.
The Centerpiece — Same MDY/SPY Ratio, Opposite Conclusions
Idea 1 conditions on a single-day event (a point) and the ratio fades; Idea 2 conditions on 15 sessions of thrust (a path) and the ratio persists. The edge is in the conditioning, not the instrument.
Robustness — Is the 65d MA Doing Any Work?
B (your literal-ish definition), C (above-MA + thrust), D (thrust alone, no MA) and E (thrust while below the MA) are statistically indistinguishable — the moving-average reclaim is confirmation, not the edge.
Idea 1 — Forward Returns: MDY, SPY, and the Ratio
Idea 1 — Per-Event Log (most recent 18 of 85)
MDY ATH dateSPY ddMDY +21dMDY +252dSPY +252dRatio +63dRatio +252d
2026-08-12-0.1%
2026-06-04-0.3%+0.3%
2026-04-20-0.2%-2.6%-2.3%
2026-02-06-0.7%-4.4%-3.6%
2026-01-05-0.4%+3.1%+5.4%
2024-11-22-0.5%-5.4%-0.2%+15.5%-6.7%-13.6%
2024-10-16-0.3%+1.6%+3.4%+16.7%-1.2%-11.4%
2024-03-28-0.0%-4.3%-2.4%+8.6%-7.5%-10.1%
2024-02-12-0.0%+4.7%+14.2%+23.3%+1.5%-7.3%
2021-10-22-0.1%+2.9%-15.6%-15.1%-2.7%-0.6%
2021-04-14-0.3%-0.1%-2.2%+7.9%-6.9%-9.4%
2021-02-09-0.1%+4.0%+6.8%+17.1%+1.1%-8.8%
2020-12-15-0.2%+6.0%+21.9%+29.1%+7.6%-5.6%
2020-11-09-0.5%+7.5%+40.3%+33.7%+9.8%+5.0%
2020-02-13-0.1%-36.3%+23.0%+18.7%-11.7%+3.7%
2020-01-14-0.2%+1.3%+18.7%+18.2%-14.3%+0.5%
2018-07-09-2.2%+0.4%-1.8%+9.6%-5.6%-10.3%
2018-06-06-2.8%+0.1%-3.6%+5.7%-1.8%-8.8%
Idea 2 — Forward Returns: Ratio (the trade) and MDY (mostly beta)
Idea 2 — Event Log (all 18 thrust signals)
Signal date15d thrustRatio +63dRatio +126dRatio +252dMDY +252d
2026-06-10+4.2%
2024-07-24+4.5%-2.8%-2.8%-9.0%+8.4%
2023-12-04+4.7%-0.5%-4.8%-4.8%+28.4%
2022-04-29+4.1%+0.8%+3.1%-1.7%-0.3%
2022-02-18+4.0%+1.0%+0.6%+7.6%+0.4%
2020-10-15+4.2%+11.7%+12.9%+6.3%+38.4%
2020-07-30+4.2%+0.1%+8.8%+5.7%+45.2%
2020-05-26+4.6%-3.6%+2.9%+8.9%+54.8%
2016-11-17+4.1%+0.6%-2.4%-3.4%+16.1%
2009-12-22+4.2%+3.1%+4.6%+10.0%+26.2%
2008-12-22+4.3%+2.3%+5.3%+10.0%+44.5%
2008-02-04+4.2%+1.8%+6.0%+1.0%-37.2%
2000-12-08+5.8%+3.7%+7.2%+12.2%-4.1%
2000-05-02+4.7%+3.9%+9.9%+22.9%+9.3%
2000-01-06+4.4%+5.4%+9.6%+23.4%+17.0%
1999-04-27+4.0%+5.4%+2.6%+11.1%+21.2%
1999-01-04+4.6%-12.5%-4.6%-5.3%+13.2%
1998-10-29+6.2%-1.9%-2.0%-3.5%+22.2%
Regime Dependence — 12-Month Ratio Outcome of Every Thrust Signal
The aggregate edge is carried almost entirely by 1999–2001 and 2020. Every signal from 2021–2024 lost on a 12-month basis. The live June 2026 signal fires right after that losing streak.
Idea 1 — Forward Probabilities (MDY / SPY / Ratio)
HorizonNMDY medwinSPY medwinRatio medwin
10d85+0.2%54%+0.3%56%-0.2%40%
21d84+1.0%60%+1.0%62%-0.2%46%
42d84+1.9%65%+1.9%71%-0.3%42%
63d83+2.1%63%+3.3%67%-0.7%42%
126d82+5.0%70%+4.7%76%-1.3%39%
252d80+8.6%74%+11.2%81%-2.3%30%
Idea 2 — Forward Probabilities (Ratio / MDY), n=18
HorizonNRatio medwinMDY medwin
10d18+0.4%72%+1.9%61%
21d18-0.2%50%+1.8%61%
42d18+0.4%56%+2.6%78%
63d17+1.0%71%+4.7%76%
126d17+3.1%71%+8.7%76%
252d17+6.3%65%+17.0%82%
💰 The "Take-It" Trade-Management Plan — Profit-Taker & Loss-Taker

Two mechanical scale-out overlays on the same trigger. Enter 100% within two days of the signal, then manage the position in tranches — 20% / 30% / 30%, with the final 20% always exiting at the end of the study window.

Where the deviations come from. For every completed historical precedent we measure how far the trade travelled in your favor (its Maximum Favorable Excursion). The three profit deviations span that favorable-outcome distribution — a low, median and high reading of how far these trades historically ran. (For thin samples these are the literal weakest / typical / strongest outcomes; for larger samples they are robust quartiles, so one outlier can't set the rungs.) The three loss deviations are the exact mirror of the profit deviations — the same levels flipped below the entry, so a +4% first take-profit pairs with a −4% first stop. It's a symmetric bracket. A rung only fills if price actually trades there; unfilled tranches exit with the balance at the window close. Mirrored for shorts (the profit-taker buys the name back lower; the loss-taker covers higher).

⚠️ Small-sample caveat. With only a handful of completed precedents these levels are illustrative, in-sample anchors — a disciplined way to turn "what this pattern historically did" into entry, take-profit and stop levels, not a statistically validated system. The live bracket is the payoff, not the backtest averages.

Relative-Thrust (MDY/SPY) — the bracket ladder & where the live the MDY/SPY thrust trade stands
RungReturnPriceActionLive status
Profit · 3rd dev+4.4%0.975sell 30%pending
Profit · 2nd dev+2.9%0.961sell 30%pending
Profit · 1st dev+1.9%0.951sell 20%● filled
● Entry0.0%0.934buy 100%Day 55
Loss · 1st dev-1.9%0.916cut 20%● cut
Loss · 2nd dev-2.9%0.907cut 30%● cut
Loss · 3rd dev-4.4%0.892cut 30%pending
● Live Relative-Thrust (MDY/SPY): in at 0.934, now -4.1% (Day 55; peak +2.1%, trough -4.1%). Profit-taker: 20% scaled out — next take-profit → 2nd dev 0.961 (+2.9%). Loss-taker: 50% cut — next stop → 3rd dev 0.892 (-4.4%).
Relative-Thrust (MDY/SPY) — both ladders across every historical precedent
Signal datePeak (MFE)Trough (MAE)Buy & hold Profit-takerP-devsLoss-takerL-devs
1998-10-29+3.7%-2.6%-2.5%+0.0%-2.4%
1999-01-04+0.0%-11.9%-9.4%-9.4%-4.5%
1999-04-27+5.6%+0.0%+3.9%+3.4%+3.9%
2000-01-06+14.8%-0.2%+4.7%+3.5%+4.7%
2000-05-02+4.1%-0.4%+2.6%+2.5%+2.6%
2000-12-08+4.9%-3.3%+4.4%+3.5%+1.0%
2008-02-04+1.9%-2.7%+1.2%+1.4%+0.6%
2008-12-22+4.4%-0.1%+3.3%+3.2%+3.3%
2009-12-22+3.7%-0.9%+3.6%+3.0%+3.6%
2016-11-17+2.6%-0.1%+0.1%+0.5%+0.1%
2020-05-26+1.7%-6.4%-4.6%-4.6%-3.5%
2020-07-30+2.5%-3.6%+1.8%+1.8%-0.3%
2020-10-15+12.2%-0.0%+10.9%+4.8%+10.9%
2022-02-18+1.3%-3.6%+1.2%+1.2%-0.7%
2022-04-29+2.0%-2.0%+0.6%+0.9%+0.1%
2023-12-04+2.9%-3.2%-0.1%+1.2%-1.3%
2024-07-24+1.3%-4.8%-2.6%-2.6%-3.1%
n=17 completed precedents · profit-taker avg +0.8%, loss-taker avg +0.9%, buy-&-hold-to-window-end +1.1%. ● = deviation reached, ○ = never reached (that tranche exited with the balance at the window close).
Relative-Thrust (MDY/SPY) — laddered exits vs buy-&-hold
The Two Ideas

This study tests two distinct signals on the same instrument. Idea 1 fires when the S&P MidCap 400 (MDY) closes at a fresh all-time high while the S&P 500 (SPY) sits below its own high — a mid-cap-leadership "poke." Idea 2 fires when the MDY/SPY ratio reclaims its 65-day moving average and is simultaneously up more than 4% over the trailing 15 sessions — a relative-momentum "thrust." They reach opposite conclusions, and the reason is the most useful thing on this page.

Idea 1 — A Beta Signal, Not a Relative Trade

The breadth poke is genuinely bullish — but for the whole market, not for mid-caps specifically. Twelve months out, MDY is higher 80% of the time (median +8.6%) and SPY is higher 81% of the time (median +11.2%). Healthy broadening tends to precede broad gains. But SPY out-gains MDY: the MDY/SPY ratio's 12-month median is -2.3% with just a 30% win rate. The per-event log makes it concrete — the ratio's one-year return is negative in nearly every recent instance. The intuitive read ("mid-caps are leading, so buy MDY versus SPY") is backwards: a single-day new high is often an isolated poke near the top of a range that mean-reverts. Trade it long the market, not long the spread.

Idea 2 — The Thrust Persists (but the MA is a red herring)

As literally specified — a same-day cross above the 65d MA and +4%/15d — the setup has occurred only twice in 30 years (Apr 1999, Jul 2024); n=2 is untradeable, because by the time the ratio is up 4% it has usually crossed the MA days earlier. The faithful tradeable read (reclaim within the last ~10 sessions, still thrusting) gives 18 events, and here the ratio momentum does carry: 12-month median +6.3%, win rate 65%, versus a roughly flat-to-negative baseline.

Be clear about what the edge is, though. Stripping the 65d-MA filter entirely leaves the result unchanged — thrust alone (n=38) prints +6.0% at 12 months versus +6.0% for above-MA-plus-thrust, and thrust while below the MA (n=5) is actually the best at +8.3%. So the moving-average reclaim is confirmation, not cause: the signal is the 15-day relative thrust. We keep the MA in the headline definition because it is what you asked for and it improves entry timing slightly, but the page would be dishonest if it implied the MA earns its keep.

Point vs Path — Why the Conclusions Diverge

Same ratio, opposite results. Idea 1 conditions on a point (one new-high print); Idea 2 conditions on a path (15 sessions of accumulation). The point catches isolated pokes that revert; the path catches genuine regime shifts that continue. This is the general lesson worth more than either win rate: the signal lives in the conditioning, not the instrument.

⚠️ Regime Dependence — Read This Before Sizing

The +6%-ish aggregate edge on Idea 2 is not evenly earned — it is a bet on a small/mid-cap-favorable regime. The era split is stark: the thrust signal printed +11% to +23% across 1999–2001 (post-bubble value rotation) and +6% to +9% through 2020, but essentially every signal from 2021 through 2024 lost — −8.9% (Mar 2021), −9.3% (Oct 2022), −4.8% (Dec 2023), −9.0% (Jul 2024), −14.6% (Nov 2024) on a 12-month basis. Strip 1999–2001 and 2020 and the edge largely disappears. The live June 2026 signal is firing immediately after the worst losing streak this setup has ever had, during the tail of a mega-cap-dominated tape. Treat Idea 2 as a conditional trade — worth taking only when mid/small-cap breadth is genuinely expanding, not as an always-on signal.

Trade Construction
Current Setup — June 2026

MDY closed at a new all-time high on Aug 12, 2026 with SPY about 1.4% below its own high (Idea 1 active). The ratio's recent-reclaim-plus-thrust variant fired Jun 10, 2026, with the ratio up -2.0% over the trailing 15 sessions and sitting at 0.896 (Idea 2 active). Per the regime caveat above, the honest verdict is constructive on the market (Idea 1) but only conditionally constructive on mid-cap relative outperformance (Idea 2) — the historical edge is real but has been absent for three years.