S&P 500 to continue its steady push higher with next resistance seen at ·3720/25 – Credit Suisse

The S&P 500 maintains its break above key trend resistance from February and analysts at Credit Suisse maintain a bullish outlook with resistance seen next at 3720/25, then 3765/85.

Key quotes

“The S&P 500 continues its steady push higher and with the 3700 psychological barrier cleared we maintain our immediate bullish bias with resistance seen next at 3720/25, which we look to cap at first. Above in due course though should see what we look to be a tougher test of a cluster of Fibonacci projection levels in the 3765/85 band, from which we would look for a fresh consolidation phase. Big picture though, we continue to eventually look for the ‘measured triangle objective’ at 3900.” 

“Our main concerns remain the ‘euphoric’ state of the rally – 91% S&P 500 stocks are above their 200-day average (a level not seen since 2013) and the market is well above the upper end of what we see as its ‘typical’ extreme (15% above its 200-day average) – but these on their own do not for now prohibit us looking for further gains.” 

“Support moves to 3679 initially, beneath which can see a retreat back to the price gap from Friday morning at 3667/57, with the 13-day average and further gap/price support at 3646/44 now ideally holding any deeper setback.”