S&P 500: 63-day average at 3292 holds but risks for a deeper setback linger – Credit Suisse

S&P 500 has fallen as expected to test its key medium-term 63-day average, now at 3292. Although this is holding at present, the risk is seen for a close below 3292 with next supports seen at 3285/80 and then 3260/59, per Credit Suisse.

More: S&P 500 Index needs further fiscal support to avoid a correction

Key quotes

“The S&P 500 remains under pressure after completing a small bearish ‘reversal day’ at its 13-day exponential average and the decline has extended as expected for a test of its 63-day average at 3292.

“Although the 63-day average at 3292 is holding for now we are seeing key supports break for a range of other markets and sectors (notable Tech) and a break and close below 3292 is seen likely. If confirmed this should then see support next at 3285/80 and stretching down to the 23.6% retracement of the rally from March at 3260/59, which we look to try and hold. Should weakness instead directly extend, this would warn of a more protracted and deeper correction lower with support seen next at 3204/00.” 

“Resistance moves to 3329 initially, then 3345, with 3375/85 now ideally capping further strength.”