The S&P 500 has managed to hold a key support at 3,595. With bullish RSI divergences on the downside, Credit Suisse analysts expect a a deeper recovery, but still corrective. However, in general, they maintain a negative outlook.
Strength is considered temporary and corrective
“With bullish divergences on the daily and weekly RSI and with sentiment and amplitude measures pointing to an oversold condition, we see room for a deeper corrective rally to emerge, or at least a longer consolidation“.
“Broadly speaking, our bias is still view the strength as temporary and corrective and we maintain our negative outlook for 3-6 months“.
“Resistance is initially seen at 3,790/92above which should clear the way for further strength until the next resistance in 3,828and then the 38.2% retracement of the August/September drop in 3,867. With the 23.6% retracement of the entire 2022 drop just above, in 3,875and with the maximum at the end of September in 3,907we will look for a limit in this zone of 3,867/3,907.”
“The support seen in yesterday’s price gap, which starts at 3,726 and extends to 3,678. Below this latter level it is necessary to ease ideas of a corrective rally to retest the 200-week moving average. 3,595.”
Source: Fx Street
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