S&P 500 Index to extend its correction lower on a break below 4118/12 – Credit Suisse
S&P 500 remains below 4200. Economists at Credit Suisse are looking for a potentially lengthy consolidation/corrective phase to emerge with key near-term support still seen at 4118/12.
See – S&P 500 Index: Three factors to contribute to the stock market trailing the economy – CE
Move below 4118/12 needed to mark a near-term top
“With a range of ‘red flags’ and overextension signals still in place as well as daily bearish momentum divergences and a bearish MACD cross lower we continue to look for the unfolding of what may be a lengthy consolidation/corrective phase.”
“Whilst resistance from the top of the price gap from yesterday at 4188/93 caps the immediate risk can stay lower with support seen at 4157/55 initially and then more importantly at 4118/12 – the late April low and lower end of the uptrend channel from early March. Below here though is needed to set a top to add weight to our corrective roadmap with support then seen next at 4086, then 4079 – the 38.2% retracement of the rally from late March.”
“Above 4193 should see strength back to 4209/12. A close above 4219 can reassert the uptrend and end thoughts of a consolidation, with resistance seen next at 4225/29, with tougher resistance expected at 4259/60.”
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FXStreet Insights Team
FXStreet
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