S&P 500 Index: Overnight rebound to extend, but with 4323/27 capping – Credit Suisse

S&P 500 has fallen sharply on increased volume for a test of its 63-day average, currently at 4227. Economists at Credit Suisse see scope for the overnight rebound from here to extend further but they look for 4323/27 to ideally cap for a retest and break below 4227 in due course.

S&P 500 has already fallen to its 63-day average at 4227

“The S&P 500 has gapped lower on sharply increased volume. Near-term the violence of the decline has already seen the market fall to just shy of our first corrective target of the 63-day average, now at 4227 and our bias remains for this to hold for now and for the overnight rebound to extend.” 

“Resistance moves to 4267 initially, above which should see a move back to 4296, potentially the upper end of the price gap from yesterday and 13-day exponential average at 4323/27.” 

“Our bias is for 4323/27 to ideally cap the rebound for a retest of the 63-day average and yesterday’s low at 4233/27. A close below here should confirm our suspicions of a deeper but still corrective setback with support then seen next at the June lows at 4168/64. Below here can expose the May low at 4057.”