S&P 500 extends its rejection from the key psychological 4400 barrier. With daily and weekly RSI momentum holding bearish divergences, analysts at Credit Suisse continue to look for a correction lower for a potential test of its 63-day average, currently at 4226.
VIX to set a base above 21.82/97
“A poor end to the week for the S&P 500 has further reinforced the recent rejection from just shy of the psychological 4400 resistance barrier accompanied by daily and weekly bearish RSI momentum divergences. This is seen adding further weight to our view that we are close to the beginning of a summer corrective phase.”
“Support from the 13-day exponential average has already been removed, and a close below the lower end of the recent price gap at 4321 should confirm a corrective phase lower has already begun for a test of the recent lows at 4289/88.
“Below 4289/88 can confirm a top, with support then seen next and initially at 4267/66 and with the 63-day average now at 4226.”
“Resistance moves to 4355 initially, with a break above 4374/75 needed for a move back to 4394/4400. Above here can see a final push higher to our 4436/56 Q3 objective, also the upper end of what we see as its ‘typical’ extreme (15% above the 200-day average).”
“VIX above 21.82/97 would see a base established.”
