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S&P 500 strength has all but extended to the 4200 level. Economists at Credit Suisse remain highly alert to a potential consolidation/corrective phase from here as the market is seen at its “typical” extreme.

The Q2 target of 4200 has all but been achieved

“The S&P 500 rally is showing signs of stalling as looked for from essentially our Q2 objective of 4200 with the market seen at its ‘typical’ extreme – 15% above its 200-day average – and with Volume/OnBalanceVolume also still not confirming the new highs.”  

“We maintain our view of looking for signs of a peak to this phase here for finally a consolidation/corrective phase and indeed daily RSI momentum already looks to be topping (see lower panel above).”  

“Near-term support moves to 4140, then the lower of the recent gap and price support at 4125/21 next. Beneath here would mark a near-term top to add weight to our view for a consolidation/corrective phase with support then seen next at 4097/96, then 4068.”  

“Should strength directly extend above 4200 on a closing basis though, we see resistance next at 4225/30, then 4259/60.”

 

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