S&P 500 Index to stay capped at 4436/56 for a summer correction phase – Credit Suisse
S&P 500 strength is expected to stall at a cluster of resistances. Economists at Credit Suisse continue to look for a “summer consolidation/correction” to emerge.
Key near-term support remains seen at 4381/64
“The S&P 500 remains capped at a cluster of key resistances, including importantly our Q3 objective at 4436/56 and trend resistance from April. Whilst we see scope for a retest of this zone, with daily and weekly RSI momentum still holding bearish divergences we maintain our core view of not chasing strength through 4436/56 for now and we continue to look for a ‘summer consolidation/correction’ to emerge.”
“Key near-term support stays at the price gap from Friday morning and now also the rising 13-day exponential average at 4381/64. A close below here remains needed to add weight to our view for a corrective phase for a fall back to support at 4350, then 4331/21.”
“A close above 4456 would see the immediate risk stay higher for a move to the psychological 4500 level next, with the upper end of its ‘typical’ extreme (15% above the 200-day average), now at 4529.”