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The S&P 500 is expected for now to be capped at the top of its February “pandemic” gap at 3328/38, according to economists at Credit Suisse. At the same time, the VIX continues to hold key support and is set for a fresh rise.

Key quotes

“While support at 3198 holds though the immediate bias can stay higher for now for a test on the top of the February gap at 3328/38. We continue though to look for this to remain tough resistance for now for lengthier consolidation. However, a break in due course should clear the way for a challenge on the 3394 record high.”

“Below 3198 can mark a minor top to reinforce the likelihood for further range-trading with support then seen back at 3128/16, which we would look to hold. A break though can see a retest of support from the 200-day average, currently seen at 3046, but with only a close back below here seen raising the risk we are seeing the construction of a potentially important top.”

“The VIX continues to (just) hold key support from the top of its 2019 range at 24.81/23.54 and we look for a fresh attempt to set a near-term base above 28.58, for a rise back to 33.67 initially. A close below 23.54 though would be seen opening the door to more ‘normal’ conditions with support seen at 20 next.”