SPY 400 Gravity Well

I’m here to write about the way SPY behaves around the 400 level since it returned there earlier in May.

  1. If SPY breaks up on 397.5, it will test 399.5
  2. If SPY breaks down on 399.5, it will test 397.5
  3. If SPY breaks up on 400.5, it will test 403
  4. If SPY breaks down on 403, it will test 400.5
  5. Don’t take any entries in the 399.5-400.5 area. 399.5, 400, and 400.5 are all support levels, and having 3 of them so close together makes things unpredictable. Exit your positions in this area unless it quickly breaks through all 3 of them at once.

Here are some charts showing it. Even FOMC minutes today weren’t enough to overcome the power of gravity!