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The S&P 500 rally has lost momentum and the risk of a correction lower continues to increase, but analysts at Credit Suisse continue to give the upside the benefit of the doubt still and thus maintain an immediate tactical bullish bias whilst above 3633. 

More – S&P 500 Index: In search of a new catalyst to rise further – Morgan Stanley

Key quotes

“The S&P 500 has held support at 3633 and managed to recover back above its 13-day exponential average, but with daily MACD having also crossed lower the rally has lost momentum.” 

“Whilst 3633 holds, the upside will continue to be given the direct benefit of the doubt for now, but with a move above 3698 needed to clear the way for a move back to 3712, ahead of our 3720/25 next objective. Whilst we would expect this to cap at first, a direct break can see a cluster of what we expect to be tougher resistances in the 3765/85 zone.” 

“Near-term support moves to 3660/59. Below 3633 would see downward pressure increase further with support then seen next at 3625/22 ahead of the late November low and price gap at 3594/78, with fresh buyers expected here. Failure to hold here though would be seen exposing the 38.2% retracement of the October/December rally at 3530.”