S&P 500 remains above its 200-day average on a closing basis, now at 3015, but with daily momentum having turned lower strategists at Credit Suisse look for a consolidation/corrective phase to emerge with resistance seen at 3088 initially.

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Key quotes 

“The S&P 500 continues to importantly hold pivotal support on a closing basis from its rising 200-day average at 3015, as well as the 23.6% retracement of the March/June rally. With daily MACD momentum having turned lower and with an ‘island top’ in place, our bias remains for a broad consolidation/corrective phase to emerge.” 

“Despite the recovery seen yesterday immediate resistance remains intact at Friday’s high and 13-day average 3080/88 and above here is still needed to clear the way for strength back to the price gap from last week, seen starting at 3124 and stretching up to 3190, but with this expected to cap for now.”

“Support is seen at 3036 initially, then the 200-day average at 3015. A close below here remains needed to suggest a deeper retracement lower can be seen with support seen back at 2966, then 2957/55, which we would look to hold at first. Bigger picture though we would look for a move below here with the next meaningful support seen at the 38.2% retracement of the entire March/June rally at 2835.”