S&P 500 Index: Resistance at 4434/50 to cap for a retest of key supports at 4213/4199 – Credit Suisse

S&P 500 remains capped at its 200-day average and the 38.2% retracement of its January collapse at 4434/53. Economists at Credit Suisse continue to view this as a temporary relief bounce only ahead of a retest of the recent low, the 23.6% retracement of the entire 2020/2021 uptrend and the 38.2% retracement of the rally from October 2020 at 4223/4199.

A short-term pause only prior to the risk turning firmly lower again

“Whilst further near-term consolidation should be allowed for, we remain of the view this is a short-term pause only prior to the risk turning firmly lower again.”

“Below 4276 should clear the way for a retest of support at 4223/4199 – the recent low, the 23.6% retracement of the entire 2020/2021 uptrend and the 38.2% retracement of the rally from October 2020. Whilst we will look for evidence of a floor here again, should weakness directly extend we would see scope for further weakness to 4173/64 next, ahead of 4057 and eventually we think more important support at 3855/15.” 

“Near-term resistance moves to 4355, then 4374.” 

“A close above 4450 remains needed to mark a stabilization and a more prolonged consolidation, with resistance then seen next at 4495.”