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The S&P 500 rally has finally extended to 3900 and with further layers of resistance seen here and stretching up to 3930, economists at Credit Suisse expect the 3900/3930 area to cap at first and for a temporary consolidation phase to emerge. 

Key quotes

“Base case remains for a cap in the 3900/3930 zone and for a potentially lengthier consolidation/correction phase to then unfold. Indeed, this latest move higher has been seen on lower volume, RSI momentum holds a bearish divergence on a daily and weekly basis, which is seen adding weight to this risk.”

“Support is seen at 3875/71 initially, below which can ease the immediate upside bias for a retreat back to 3860, then 3847/37.” 

“A close below price and 13-day average support at 3817 is needed to add weight to our view we are set for a consolidation phase.”