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The S&P 500 has rebounded but analysts at Credit Suisse look for resistance from the 13-day average at 3425/35 to ideally cap further strength for a deeper corrective setback to test support at 3280/60.

Key quotes

“S&P 500 has rebounded but on lighter volume than the sell-off seen over the past few days and with the market still holding below its 13-day exponential average, currently at 3435, our bias remains to view this as a temporary bounce and for a more protracted consolidation phase to emerge within the broader uptrend.” 

“We look for resistance at 3425/35 to try and cap further strength with support seen at 3390 initially, then 3367, below which should see a move back to 3330/26. An eventual move below here can see support next at 3307/03 ahead of our ‘ideal’ objective of what we continue to look to be better support at 3280/59 where we will look for a floor – the 38.2% retracement of the rally from mid-May, 23.6% retracement of the entire rally from March, July high and 63-day average.”

“A close above the 13-day average at 3435 would suggest we are set for a high-level consolidation phase within the core uptrend with resistance seen next at 3479/89.”