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S&P 500 strength has extended to the top of its multi-year channel at 4125/30, with the index now seen moving into typical “extreme” territory. Credit Suisse’s bias though is for the rally to extend further yet to 4200, where the market would then be highly alert to signs of a potential top and correction/consolidation.  

S&P 500 is now above the top of its “typical” extreme

“We maintain an immediate bullish stance for now and continue to look for the rally to extend further, ideally to our 4200 Q2 objective, we now hold a more cautious footing given the market is seen in “extreme” territory.”  

“We see resistance next at 4138 ahead of Fibonacci projection resistance at 4175/79. Our ‘ideal’ roadmap remains for a push to our 4200 target but we essentially now look for a top in this 4175/4200 zone.”  

“Near-term support moves to 4115, then 4108, with the price gap from Friday morning at 4097/96 needing to hold to keep the immediate risk higher. Below can see a fall back to 4068.”