S&P 500 Index: Resistance at 4502/07 caps for a correction lower – Credit Suisse

S&P 500 remains capped as looked for by trend resistance from April at 4502/07. With daily RSI momentum showing a glaring divergence, strategists at Credit Suisse continue to look for a correction lower.

See: S&P 500 Index to reach the 5000 level by year-end – UBS

Daily RSI momentum holds a glaring bearish divergence

“S&P 500 has retested and again rejected key trend resistance from April, seen a touch higher today at 4507 and with a glaring triple RSI momentum divergence in place we continue to look for a correction lower or at least some consolidation.” 

“Key support stays seen at the price gap from Monday morning at 4450/42, a close below which can also see the 13-day exponential average removed to add weight to our view for a pullback towards 4419, potentially 4407/06. 

“A direct and closing break above 4507 though can keep the trend directly higher with resistance seen next at 4517/25, ahead of 4565. We do not though see the market at the upper end of its ‘typical’ extreme though until it reaches 15% above its 200-day average, which is still some considerable distance away at 4640.”