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The S&P 500 Index ideally holds below resistance at 3778/87 to maintain the immediate threat of a deeper corrective setback. Big picture though, analysts at Credit Suisse continue to look for the unfolding of a lengthier consolidation phase within the core uptrend.

See – S&P 500 Index: Recent comparisons to the tech bubble are misplaced – Morgan Stanley

Key quotes

“S&P 500 has recovered back to the price gap from last Friday morning, also the midpoint of the ‘real body’ of the bearish ‘reversal week’ at 3778/87. With DeMark Sequential exhaustion signals still in place, we continue to look for this to try and cap for a fresh move lower and the unfolding of a lengthier corrective phase.” 

“Support is seen at 3755 initially, with a move below 3726 needed for a fall back to 3694 and then the 63-day average and low for the year at 3673/63, where we would look for an attempt to establish a floor. A direct break can see bearish pressure increase further for a test of the 38.2% retracement of the October/January rally and December lows at 3636/28.” 

“Above 3787 though would lessen the threat of a more serious price move lower and instead suggest we are set for a high-level consolidation range, with resistance then seen next at the larger price gap at 3837/50.”