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The S&P 500 Index has achieved the Credit Suisse analyst team target/resistance at 3429/44 and they continue to look for this to cap for now, with support seen at 3348, then 3327/23.

See – S&P 500 Index: Rate scare to benefit recovery stocks – Morgan Stanley

Key quotes

“The S&P 500 has extended its recovery to our recovery target zone, seen starting at the mid-September highs at 3425/29, and stretching up to the 61.8% retracement of the fall from September at 3444. This has capped as expected, with the subsequent sharp rejection resulting in the completion of a bearish ‘reversal day’ (although on relatively muted volume) and this should add weight to our scenario in looking for the unfolding of a lengthier consolidation phase.

“Big picture, we continue to view this as a temporary consolidation ahead of the core uptrend eventually resuming, with a clearer larger base now potentially forming.” 

“Immediate support is seen from the lower end of the recent price gap at 3348/47, then, more importantly, the recent lows at 3327/23, which we continue to look to ideally hold. A break though would curtail thoughts of a larger base for now with support then seen next at 3298/93, then 3279.” 

“Resistance at 3397/99 capping can keep the immediate risk lower. Above can see a retest of 3429/44. Above here would now see a more important base established, especially given the momentum turn higher to mark a resumption of the core uptrend and a move back to the 3588 high.”