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The S&P 500 has seen another impressive move higher to the top of its “triangle” at 3525/50 and this is expected to cap for now for a fresh swing lower in the range, the Credit Suisse analyst team reports.

Key quotes

“Another impressive gap higher has already seen the S&P 500 move to the top of its ‘triangle’ range, seen starting at 3525 and stretching up to the 3550 October high. Whilst our broader outlook remains constructive for the eventual completion of this large bullish ‘triangle’ pattern, we feel the market has got ahead of itself and it is probably too early from a pattern perspective to see this achieved now. Our bias is as flagged for 3525/50 to cap for now for a fresh swing lower in the ‘triangle’.”

“Below support from the lower end of the price gap from yesterday at 3486 can add weight to this view with support then seen next at 3459, then the lower end of the price gap from yesterday at 3443/40. Whilst we look for an attempt to hold here, a break can see a move back to what we see as better support, seen starting at 3405 and stretching down to 3389/88.” 

“Post a setback we would then look for a clear and sustained move above 3550 to see the bull ‘triangle’ confirmed for a move back to the 3588/3600 record high and ‘typical” extreme. If the ‘triangle’ story is correct though we would see scope for new record highs in due course and a move towards 3900.”