The S&P 500 has avoided a bearish “reversal week” but with support from the 13-day average broken, analysts at Credit Suisse look for a corrective phase to develop for now beneath resistance at 3479/97.
Key quotes
“A bearish ‘reversal week’ was avoided last week but the market did close back below its 13-day exponential average and whilst the core trend stays seen higher, with the market having been to the upper end of its ‘typical’ extreme our bias is for a more protracted consolidation phase within this uptrend.”
“Key as to the severity of a setback remains seen from rates markets and whether we see a more decisive move lower in 10yr US Breakevens and a base in 10yr US Real Yields, neither of which we have yet to see, although the risk is there.”
“Resistance is seen at 3479, then the 61.8% retracement of last week’s fall at 3495/97, which we look to now ideally cap to keep the immediate risk lower.”
“Support is seen at 3416 initially, with a break below 3386/82 needed to clear the way for a fall back to 3350 and eventually what we continue to look to be better support at 3280/60. Above 3497 would suggest the correction may already be over with resistance then seen next at 3537/38, then 3565.”
Share
