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S&P 500 maintains a near-term base despite the mild weakness seen on Tuesday and overnight, which suggests the worst of the price fall in the corrective phase may be behind us. Nevertheless, analysts at Credit Suisse look for this correction to extend further in time as the market moves into a consolidation phase ahead of the US election.

More:

 

  • S&P 500: Three critical policy disappointments behind the correction – Morgan Stanley
  • Implementing national lockdowns to lead to a new bear market for stocks – Charles Schwab

  • S&P 500 Index: Near-term correction, long-term recovery – Morgan Stanley

Key quotes

“Whilst we expect the market to open lower today we look for 3298/93 to try and hold to maintain the base, clearing the way for the recovery to extend in the short term. Thereafter, we look for a close above the 38.2% retracement of the September fall at 3354 next to clear the way for a move to gap resistance at 3375/85 next, then the mid-September highs at 3425/29 which we expect to prove a tougher initial barrier, as we expect a lengthier period of sideways price action to now develop ahead of the election.”

“Support is seen at 3330/28 initially, then 3315. Below 3298/93 can raise the prospect of further sideways ranging, with support next at 3279.”