S&P 500 Index: Weekly close above 4524 is critical to avoid a more correction lower – Credit Suisse

The S&P 500 has completed a large bearish “outside day” to reinforce the existing bearish “reversal week” from 4750. A weekly close below the key 63-day average support at 4524 would warn of a more serious correction lower, analysts at Credit Suisse report.

A close above 4524 this Friday can help stabilize the market

“Critical remains as to how we close the week, especially with Payrolls on Friday as a weekly close below 4524 would warn of a more serious correction lower especially in light of widening US credit spreads and with both the VIX and Oil also currently through key technical levels.” 

“Immediate support is seen at the 50% retracement of the October/November rally at 4512/10, below which can see support next at 4486 ahead of gap support from mid-October at 4448/38. The critical long-term 200-day average is currently seen lower at 4299.” 

“A close above 4524 this Friday can help stabilize the market with resistance then seen next at 4560. More important resistance is seen at the recent price gap, 13-day exponential average and ‘outside day’ high at 4631/55.”