S&P 500: Resistance at 3396 continues to cap with support seen at 3310 – Credit Suisse

S&P 500 has extended its rejection from resistance at 3426/27 and with a small bearish “reversal day” in place there remains the risk for a deeper corrective setback to test the key medium-term 63-day average, now at 3291, which analysts at Credit Suisse look to then try and hold.

Key quotes

“S&P 500 has gapped lower after being capped at its 13-day exponential average, 38.2% retracement of its fall and price resistance at 3426/27 and with a small bearish ‘reversal day’ in place the market stays seen at risk to a lengthier corrective setback/consolidation.” 

“Support moves to 3329 initially, below which should see a move back to the 3310 recent low. Beneath here can then see a test of our ‘ideal’ correction target of the 63-day average, now at 3291. With further clusters of price support seen stretching down to 3260/59, we continue to look for a floor here.” 

“Resistance moves to 3385 initially, with the 13-day average now seen at 3396. A close back above here can reinforce a near term range, but with a break above 3426/29 needed to see a near-term base has been established to ease the threat of a deeper corrective setback, opening the door to a move back to 3479/82.”