The SPDR S&amp;P 500 ETF Trust (NYSE:SPY), which tracks the S&amp;P 500, recently closed below its 200-day moving average. A market expert said this key indicator should not be ignored by investors and provided some recent examples of what happened the last few times this level was breached.



<h2>Bad Things Happen</h2>



Freedom Capital Markets Chief Market Strategist Jay Woods recently highlighted cracks forming in the markets and a chance for market indexes to fall below key levels.



On March 19, the SPDR S&amp;P 500 ETF Trust closed below its 200-day moving average, a move that came after more than 200 days in a row above the key indicator.



&#34;The S&amp;P 500 finally breached this key technical and psychological level,&#34; Woods said in a recent newsletter.



Woods told readers that the old adage is that &#34;bad things happen under the 200-day moving average,&#34; which he said is true as a trend follower. The market expert cautioned that it’s not always bad news, though, and sometimes the bad news applies more to individual stocks than market indexes.



&#34;We noted that 20 of the last 28 times this happened after a 200+ day streak above it, price recaptures that average within 10 trading days. However the largest drawdown over that time was only 3%… we are currently -4.1% below the average. The likelihood we get that snapback seems less and less.&#34;



<h2>Recent Historical Drawdowns</h2>



Woods shared in his newsletter some recent history of the SPY breaking below the 200-day moving average and what happened next.



Here are some examples from the last 10 years:



<ul>
<li>2018 into 2019: index fell -17.6% below 200-day moving average</li>



<li>March 2020: index fell -26.6% below 200-day moving average</li>



<li>June 2022: index fell -19.4% below 200-day moving average</li>



<li>October 2022: index fell -19.5% below 200-day moving average</li>



<li>April 2025: index fell -19.5% below 200-day moving average</li>
</ul>



Woods said that in all of these cases except for the bear market of 2022, the move below the 200-day moving average was &#34;short lived&#34; and investors got good entry points for the short and long term of the overall market.



&#34;We just need to ask which scenario the current situation is most likely to resemble from a stock market point of view.&#34;



The market expert said now could be a good time to &#34;put money to work&#34; ahead of a snapback rally.



&#34;Remember the biggest rallies in the market also happen under the 200-day moving average.&#34;



<h2>SPY Price Action</h2>



The SPDR S&amp;P 500 ETF Trust traded at $631.97 Monday, versus a 52-week trading range of $481.81 to $697.84. The ETF is down 7.8% year-to-date in 2026, but remains up 12.7% over the last 52 weeks.



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A market expert emphasizes the significance of the SPDR S&P 500 ETF Trust (SPY) closing below its 200-day moving average, warning that historically, this has led to market declines. Jay Woods from Freedom Capital Markets noted that while past instances often resulted in short-lived downturns, the current situation shows a 4.1% drop below the average, raising concerns about a potential snapback rally. He suggests that now may be an opportune time for investors to consider entering the market, as significant rallies often occur under this moving average.

- The SPDR S&P 500 ETF Trust recently closed below its 200-day moving average, a significant indicator noted by market strategist Jay Woods.  
- Woods pointed out historical examples where the index faced declines after breaching this level but also mentioned that recoveries typically occurred within 10 trading days.  
- With the ETF trading at $631.97, down 7.8% year-to-date in 2026, Woods suggested this may present a buying opportunity ahead of a potential market rebound.

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'Bad Things Happen': Market Expert Highlights Importance Of Market Falling Below 200-Day Moving Average