S&P 500: Resistance at 3319/29 caps for a deeper corrective setback – Credit Suisse

S&P 500 ideally holds below resistance at 3319/29 to keep its immediate risk lower for a deeper corrective setback to 3204/00, potentially the 200-day average at 3104, analysts at Credit Suisse apprise.

More:

• S&P 500 Index: Rotation needs macro support – Charles Schwab

• Equity Markets to extend the correction another 10% – Morgan Stanley

Key quotes

“The S&P 500 gapped sharply lower on Monday at the open and although the market subsequently managed to recover a good proportion of these losses in the afternoon the price gap from yesterday morning remains intact and with the market still below its 63 and 13-day averages we continue to look for a deeper corrective setback to emerge.”

“Immediate resistance is seen at 3286/92, with the top of the price gap from yesterday at 3319 now ideally capping to keep the immediate risk lower.”

“Support is seen at 3259/57 initially, beneath which should see a move back to 3229 and then a cluster of price supports at 3204/3198, which we look to hold at first. A direct break though can expose the 200-day average at 3104.”

“Above 3319/29 would suggest a deeper recovery can be seen back to the 13-day average and 38.2% retracement of the sell-off at 3362/70, but with this then expected to remain tough resistance.”