S&P 500 maintains the strong tone set late Friday and above 3323/29 has seen a near-term base confirmed to suggest the worst of the price fall in the corrective phase may be behind us, per Credit Suisse.
“The S&P 500 has maintained the strong tone set late Friday after holding key support and our next objective at 3204/3198 and the market has gapped higher, albeit on muted volume for a break above resistance at 3323/29 – the falling 13-day exponential average, top of the accelerated downtrend from early September and high of last week. This sees a near-term base established to suggest the worst of the corrective decline may be behind us in terms of price declines, clearing the way for the recovery to extend.”
“We look for a close above the 38.2% retracement of the September fall at 3354 to clear the way for a move to gap resistance at 3375/85 next, then the mid-September highs at 3425/29 which we expect to prove a tougher initial barrier.”
“Support is seen at 3333 initially, then 3315, with gap support from yesterday at 3298/93 now ideally holding to keep the immediate risk higher. Below can raise the prospect of further sideways ranging, with support next at 3279.”
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