The S&P 500 rally continues to lose momentum at the 3394 record high, while with a daily RSI momentum divergence in place, the risk for a correction lower is growing steadily, the Credit Suisse analyst team reports.
Key quotes
“A neutral ‘inside range’ session to end the week for the S&P 500 leaves our immediate outlook unchanged and with a small ‘doji’ session in place from just ahead of the 3394 record high and with daily RSI momentum holding a small bearish RSI divergence, the risk for a correction lower continues to grow.”
“Support at 3355 needs to hold to avoid this to keep the immediate risk higher for a challenge on the 3394 record high. Beyond here can see an overshoot to potential trend resistance, today seen at 3419, potentially as high as 3432/36 which we then look to cap for a consolidation/corrective phase.”
“Below 3355 can further increase the risk for a correction lower for a move back to the recent low and 13-day average at 3328/26. Only a close below here though would suggest a correction lower is finally underway, with support then seen next at 3301, then 3271.”
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