S&P 500: Lengthy corrective phase underway with support seen at 3076 – Credit Suisse

S&P 500 strength has been rejected and with an ‘island top’ in place beside daily MACD momentum having turned lower strategists at Credit Suisse continue to look for a lengthier consolidation/corrective phase to emerge with support seen at 3076/66.

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Key quotes

“With an ‘island top’ in place and with daily MACD momentum having turned lower this is seen adding weight to our core view that the market is now in a consolidation/corrective phase, which we look to extend further.”

“Immediate support is seen at 3083 then the price gap from the beginning of last week at 3076/66. Beneath here remains needed to ease the immediate upside bias to reinforce the broader ranging scenario, with support then seen next at 3044 ahead of the 200-day average at 3019/18. A weekly close below here remains needed to suggest a more concerted correction lower can emerge, with the 38.2% retracement of the entire rally from March at 2835.” 

“Resistance is seen at 3116 initially, then 3140, with a break above 3153/56 needed to clear the way for strength to extend back to the top of the price gap from last week at 3181/90, which we continue to look to cap. Above 3190 though can see the risk stay higher for a test of the potential downtrend from the February peak, today seen at 3213.”