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The S&P 500 Index has broken support from its uptrend from last October and price support at 4170/68, clearing the way for a test of the 63-day average at 4142, the Credit Suisse analyst team reports.

Initial resistance seen at 4189  

“S&P 500 is coming under increasing pressure following the failure to clear our next flagged resistance at 4260 and not only have we seen a sharp downturn in momentum and OnBalanceVolume but also now a move below the uptrend from last October and also key price support from the early June low at 4170/68. This sees a top complete to clear the way for a deeper setback to test the 63-day average, currently seen at 4142. Our bias would then be to look for signs of stabilization here.”  

“A clear and closing break below 4142 would warn of a more concerted and lengthier corrective phase, with support seen next at the mid-May price gap at 4122/16 and probably eventually back to the May lows at 4062/57.”

“Resistance is seen at 4189 initially, then the price gap from Friday morning at 4205/22, with the immediate risk seen lower whilst below here.”