A correction to the S&P 500 strong March/June rally has finally begun, in the opinion of analysts at Credit Suisse who look for a close below the 200-day at 3014/13 to confirm this view with support below 2984 seen at 2975.
Don’t miss S&P 500: Pullback to consolidative zone leaves room for a leg higher – Charles Schwab
Key quotes
“The S&P 500 price action from last week is seen as negative with an approximate (although not textbook) ‘island top’ in place and with daily MACD momentum having turned lower. As a consequence, we now finally look for a correction to the strong rally from March to finally emerge.”
“We look for resistance from Friday’s high and now also 13-day average 3086/88 to now ideally cap and for the market to see a close below its 200- day average at 3014/13. This should then reinforce the view that a correction lower is indeed underway with support below 2984 seen at 2970 next, then 2957/55, which we would look to hold at first. Bigger picture though we would look for a move below here with the next meaningful support seen at the 38.2% retracement of the entire March/June rally at 2835.”
“Near-term resistance is seen at 3056. Above 3086/88 would clear the way for strength back to the price gap from last week, seen starting at 3124 and stretching up to 3190.”
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