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S&P 500 remains capped at its near-term downtrend and analysts at Credit Suisse continue to look for a more protracted consolidation/corrective phase to emerge. The spotlight turns back to key flagged supports at the 63-day average and early February price gap at 3792/74, a close below which should clear the way for a deeper setback.

See –  S&P 500 Index: Rising rates indicates a serious shift in market outlook – Morgan Stanley

Key quotes

“We continue to look for a more protracted consolidation/corrective phase to unfold, but with the risk now seen growing steadily that we are in fact set for a deeper correction lower.”  

“Key flagged support remains seen at 3792/74 – the early February price gap, rising 63-day average and recent low. A close below here should clear the way for a fall to potential trend support at 3735/34, with the real risk for an overshoot to the late January low at 3694. A sustained move below here would warn of a more concerning top.”  

“Resistance is seen at 3848 initially, with the immediate risk now seen lower whilst below 3870/75. Above can see a retest of the downtrend at 3903/07.”