S&P 500 Index set to resume its uptrend from the 4520 support – Credit Suisse

Economists at Credit Suisse look for the correction lower in the S&P 500 to be contained at the key rising medium-term 63-day average around 4525/20. Their bias remains for a floor here and for the core uptrend to eventually resume.

Weakness in S&P 500 remains a corrective setback

“We see scope for an overshoot below here to the 63-day average at 4525/20. Despite the presence of a bearish ‘reversal week’ (which we treat with a little caution given the US Thanksgiving holiday), our bias remains for 4520 to hold for a sideways phase initially, followed by an eventual resumption of the core bull trend.”

“A weekly close below 4525/20 would raise the prospect of a lengthier and more damaging correction and ‘risk-off’ phase with support seen next at 4448/38 and then more importantly at the 200-day average and October low at 4297/79, with a fresh floor expected here.”

“Above 4703 is needed to suggest the corrective setback is already over for strength back to 4744/50, then 4800.”