At the end of the day there’s no perfect strategy. They all have drawbacks. The drawback of the one I recommend is that you can get whipsawed. The problem with yours is that if the market crashes you crash with it.
Yeah, I suppose the strategy I speak of, in many people's opinion, is the best possible strategy for the average professional. And of course, even if this is indeed the best possible strategy for the average professional, there are no guarantees.
Like you said, some unfortunate guy in his late 50s who is getting ready to retire with a million dollars in his account and some debilitating illness forcing him to retire could see his million drop to 500K or 250K overnight. For that one person, in this one case, that would be tragic. For this person it's probably too late to benefit from a market recovery.
One way for a market investor to prepare for this, again no guarantees, is to invest one third or more in bonds. That's specially true for older investors.