I’m here to write about the way SPY behaves around the 400 level since it returned there earlier in May.
- If SPY breaks up on 397.5, it will test 399.5
- If SPY breaks down on 399.5, it will test 397.5
- If SPY breaks up on 400.5, it will test 403
- If SPY breaks down on 403, it will test 400.5
- 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!
