The S&P 500 has seen an aggressive rejection from a resistance group at 3,902/12. Credit Suisse analysts they expect the key support of the 200-week moving average to be retested at 3,620/19.

The force has been a temporary recovery from the bear market

“The S&P 500 has seen an aggressive sell-off with more volume since the late September high, the drop from the 63-day moving average, and the 50% retracement of the drop since September at 3,902/12. The magnitude of the rejection and break of short-term support at 3,804 is seen as reinforcing our core view that recent strength has only been a bear market corrective rally, with a major spike now in place, though we would see this rejection further confirmed if it holds afterwards from this Friday’s payroll report.”

“Support at the 38.2% retracement of the Oct/Nov recovery at 3,751, below which there should be a drop to support at the late Oct low of 3,652/47 and then a retest of the key moving average of 200 weeks at 3,620/19.”

“Resistance is seen at 3,802/04 initially, with 3,840 as a sweet spot to keep immediate risk lower. However, the 3,894/3912 area is expected to remain a major barrier.”