Illusion of Violation: Long SPY

It is tempting to short SPY (or SPX500, ES, etc.) as it violated support at Fridays close. (top)

Here is why I am long:

Plotting SPX500 relative to the DOW or to the dollar (DXY) suggests that it is most likely to bounce up. Relative to DOW, SPX500 is on a support that has held 4 times over 4 previous months (middle). Relative to DXY, SPX500 sits on a support that has held 3 times in the last month (bottom).

All supports break one day and Monday may be that day. However, the odds favor a bounce and a long position for SPX500.

S&P 500 (SPX500)SPDR S&P 500 ETF (SPY)

Penafian