Trend following · daily rule · Indexes & ETFs
Williams Alligator on S&P 500 ETF
What the play says
SPY with the play, last two years
Shading shows the play's call from the close that triggered it.
Growth of $10,000 since 2005
Log scale. After trading costs, with T-bill interest while out.
The record
The play against buying and holding SPY over exactly the same dates, after costs.
| Play, since 2005 | Hold, since 2005 | Play, 5 yrs | Hold, 5 yrs | |
|---|---|---|---|---|
| Annual return | +5.1% | +11.0% | +8.4% | +13.9% |
| Total return | +192% | +861% | +50% | +91% |
| Worst drawdown | −17.3% | −55.2% | −10.9% | −24.5% |
| Volatility | 10.1% | 18.9% | 9.9% | 17.1% |
| Sharpe ratio | 0.36 | 0.55 | 0.48 | 0.62 |
| Time invested | 61% | 100% | ||
| Switches per year | 14.7 | 0 |
Every call, graded
Right on 121 of 320 closed calls (38%). In calls averaged +0.8%; out calls saw SPY move +0.8% on average.
| Called | Call | Price | Until | SPY moved | Result |
|---|---|---|---|---|---|
| Oct 7, 2026 | IN | $777.22 | now | +0.1% | open |
| Oct 6, 2026 | OUT | $779.09 | Oct 7, 2026 | −0.2% | ✓ right |
| Sep 28, 2026 | IN | $765.61 | Oct 6, 2026 | +1.8% | ✓ right |
| Sep 14, 2026 | OUT | $759.00 | Sep 28, 2026 | +0.9% | ✕ wrong |
| Sep 9, 2026 | IN | $760.51 | Sep 14, 2026 | −0.2% | ✕ wrong |
| Sep 4, 2026 | OUT | $768.28 | Sep 9, 2026 | −1.0% | ✓ right |
| Aug 10, 2026 | IN | $771.12 | Sep 4, 2026 | −0.4% | ✕ wrong |
| Jul 28, 2026 | OUT | $739.02 | Aug 10, 2026 | +4.3% | ✕ wrong |
| Jul 8, 2026 | IN | $743.55 | Jul 28, 2026 | −0.6% | ✕ wrong |
| Jun 26, 2026 | OUT | $727.18 | Jul 8, 2026 | +2.3% | ✕ wrong |
| Jun 18, 2026 | IN | $744.89 | Jun 26, 2026 | −2.4% | ✕ wrong |
| Jun 12, 2026 | OUT | $738.01 | Jun 18, 2026 | +0.9% | ✕ wrong |
An in call is right when the price rose before the next call; an out call is right when it fell. The latest 12 of 321 calls shown.
How the play works
- In when lips are above teeth and teeth are above jaw.
- Out as soon as that order breaks.
Williams paired the Alligator with fractals and other tools and traded both ways. Only the line order is tested here.
The case against
Valeriy Zakamulin tested moving-average timing on up to 155 years of U.S. stock data and found no statistically significant edge in the second half of that record. The rules earned their keep in a few severe bear markets and lagged buy and hold for long stretches in between.