Economists at Credit Suisse maintain a tactical bullish outlook for strength back to 3645, then trend resistance from February at 3668, but with support at 3585 needing to hold to keep the S&P 500 immediate risk higher.
Key quotes
“The S&P 500 rally has paused near-term but with support from the lower end of the price gap from Monday morning at 3585 still intact our bias remains to continue to give the upside the immediate benefit of the doubt for now.”
“Whilst we remain cautious rather than aggressive bulls as a result of a growing number of overextension measures (85% of S&P 500 stocks are above their 200-day average and the market remains at the upper end of its ‘typical’ extreme) we look for a break above 3629 for a fresh test of the current high at 3645, with scope for an overshoot to trend resistance from February, now at 3668. This remains seen as the key test as above here should reinforce the ‘triangle’ patterns with resistance then at 3700 ahead of 3765 and eventually the ‘measured triangle objective’ at 3900.”
“A fresh rejection from 3645/68 though would be a concern, especially given the overextension and back below 3585 would raise the prospect of further sideways ranging and a fall back to 3553 and more likely a retest 3519/09.”
Share
