S&P 500 rallied further on Thursday. However, economists at Credit Suisse believe that this is a corrective recovery whilst below 4410/43, which is the downtrend from the 2021 highs and the 63-day average.
Bearish bias whilst below 4410/43
“The S&P 500 remains capped at more important resistance at the downtrend from the 2021 high, 63-day average and price gap at 4410/43. Whilst the market holds below these levels into the close, we will maintain our view that this was a corrective bounce only and continue to look for a deeper correction lower.”
“Immediate support moves to 4384, below which should trigger a fall back to the recent low at 4279, ahead of 4262/58 and then our objective of support at 4244/30 – the July low, May high and 23.6% retracement of the bull leg from last September.”
“Whilst we look for an attempt to hold at 4244/30 at first, we continue to see the risk for a break below here in due course for a test of support from the long-term 200-day average, now at 4150.”
“A closing breakout above 4410/43 should be sufficient to confirm a bullish continuation pattern and suggest that the correction is already over, earlier than we expected, for a move to 4465 next, then 4498/4500.”