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The S&P 500 fell 13.07 points, or 0.35%, to 3709 and analysts at Credit Suisse look for a correction lower and a test of the 3633 December low, but with a move below here needed to confirm a top.

Key quotes

“The S&P 500 has retested and rejected our 3720/25 next objective for the completion of a small bearish ‘reversal day’ and with a daily RSI bearish momentum divergence in place and with the market seen in a ‘euphoric’ state (90% S&P 500 stocks are above their 200-day average and the index remains above the upper end of its ‘typical’ extreme) we look for a correction lower.” 

“Below 3686 and then the 13-day exponential average at 3678 is needed to add weight to our view for a setback with support then seen next at 3646 and then more importantly at the 3633 December low. Only a move below this latter level would see a near-term top complete to warn of a more concerted corrective setback, with support seen next at 3594/90 ahead of the 38.2% retracement of the October/December rally at 3544/38.” 

“Above 3725/27 can curtail thoughts of a setback to reassert the uptrend for a cluster of what we expect to be tougher resistances in the 3765/85 zone.” 

“VIX above 27.27 would mark a near-term base to warn of a rise back to the 200-day average at 31.68.”