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S&P 500 has extended its decline following its expected rejection of resistance at 3319/29. Economists at Credit Suisse stay biased lower for a deeper corrective setback with support seen at 3204/00 and eventually the 200-day average at 3106.

More:

  • S&P 500 Index: Rotation needs macro support – Charles Schwab

  • Equity Markets to extend the correction another 10% – Morgan Stanley

Key quotes

“The S&P 500 has extended its setback after being capped as expected at near-term resistance at 3319/29 and with the falling 13-day average now also here and with a large bearish ‘outside day’ established we continue to look for a deeper corrective setback.” 

“Support is seen initially at 3230 initially, then yesterday’s low at 3209, which is just ahead of our next objective at 3204/3198, which we continue to look to hold at first. A break in due course though can expose the 200-day average at 3106, ahead of which we would look to establish an important floor.” 

“Resistance at 3282/83 ideally caps to keep the immediate risk lower. Above can see a recovery back to 3315/29, but with better sellers still expected here. Only above here would suggest we are seeing a near-term base form.”