S&P 500 Index: Setback seen as corrective and temporary ahead of a move to 4750 – Credit Suisse

S&P 500 has extended its corrective setback and analysts at Credit Suisse see scope for slightly further near-term weakness. However this setback is very much seen as corrective ahead of a sustained break higher towards 4750 by year-end.

The current setback may extend slightly further

“The S&P 500 has reinforced its small bearish ‘shooting star’ candlestick reversal with a break below support from the recent small price gap at 4569/62, which suggests a short-term correction lower is underway, with supports seen at 4537, potentially 4524/20, but with fresh buyers expected again here for now.”

“Post this short-term setback, which we very much see as temporary and corrective, our core outlook stays higher.”

“A break above 4599/4604 is needed to reassert the prior strength for a move to the aforementioned 4622/25 ‘typical’ extreme. Although we look for a fresh pause here, above in due course can see resistance next at 4632, ahead of 4665/70, with 4750 our Q4 objective.”