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The S&P 500 Index has seen its expected rejection at 3720/25 for a test of the key 3633 December low, which is holding for now. Whilst the Credit Suisse analyst team’s bias remains for a lengthier correction/consolidation, only below 3633 would mark a near-term top.  

Key quotes

“The S&P 500 setback extended to test as expected the 3633 low from earlier in December, from which a sharp recovery has been seen. Although the broader trend stays seen higher, with momentum not confirming the new highs in addition to further signs of exhaustion/’euphoria’ our bias remains to look for further consolidation/corrective weakness for now.” 

“We look for resistance from the top of the price gap from yesterday morning at 3709 to cap for now with support seen at 3682/81 initially, beneath which can see a move back to 3656, then a retest of 3636/33. Only a move below here though would see a near-term top complete to warn of a more concerted corrective setback, with support seen next at 3594/90 ahead of the 38.2% retracement of the October/December rally at 3544/38.” 

“Above 3509 can ease the threat of a deeper setback for a retest of 3725/29. Beyond here can reassert the uptrend for a cluster of what we expect to be tougher resistances in the 3765/85 zone.”