S&P 500 Index: Failure to hold the September low at 3209 to mark an important top – Credit Suisse


S&P 500 has held for now support from the 23.6% retracement of its 2020 uptrend at 3259 but whilst resistance at 3390/96 caps the Credit Suisse analyst team continues to see the risk lower for an eventual test of the key September low at 3209. Meanwhile, the VIX maintains a significant base established to mark a more concerning rise in volatility

Key quotes

“The S&P 500 sell-off has stabilized for now at support from the 23.6% retracement of the entire rally from March at 3259, but strength has thus far been capped at the beginning of the price gap from Wednesday morning and with the uptrend from mid-June broken the immediate risk stays seen lower into the US election.” 

“Whilst resistance at 3342 caps the immediate risk is still seen lower, with a break below 3259 needed to clear the way for a move to 3228, then more importantly at 3209/3199, which includes the key September low. Whilst we look for an attempt to hold here a closing break would suggest we have seen a significant top established, exposing the 200-day average, currently at 3130.”

“Above 3342 can see strength extend to the top of the gap from Wednesday and 13 and 63-day averages at 3390/96, but with fresh sellers expected here. A close above 3396 is needed to ease the immediate bearish tone.”

“The VIX above 38.28 sees a much larger base complete to warn of a more significant rise in volatility with resistance next at 44.44.”

 

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