The S&P 500 has seen an aggressive sell-off. Analysts at Credit Suisse see scope for a bounce to “fill” the price gap from Monday at 4403/4433 but their bias is for a cap here for a fresh leg lower to 4238/30.
Scope for a knee-jerk bounce following such a sell-off
“Whilst we see scope for a knee-jerk bounce following such a sell-off, our base case is that there is still further corrective weakness to be seen yet prior to a more secure low being established.”
“Immediate resistance is seen at 4370, above which should allow the market to recover to “fill” the price gap from yesterday, seen starting at 4403 and stretching up to 4433, with the key 200-day average also seen in this zone at 4409 currently.”
“We would look for a cap in the 4403/33 zone for a fresh move lower back to 4306/01, then what we look to be better support at 4238/30 – the July low, the May high and the 23.6% retracement of the September 2020/September 2021 uptrend. Our ‘ideal’ roadmap would then for a floor here for a resumption of the core bull trend.”
“A close above 4433 would suggest the worst of the corrective setback may already be over.”