SYSTEMATIC EQUITY
CONFIDENTIAL · SEPT 2026

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.

How It Behaves
QQQ Dip vs SPY Buy & Hold — 2014–2026
StrategyWin RateAnn. ReturnMax Drawdown% Time In
QQQ Dip · 1 week59%+2%−11%8%
QQQ Dip · 1 month72%+10%−21%33%
QQQ Dip · 3 months84%+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.
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