Nov 03, 2022
VOT Research Desk
The 3902/12 resistance area has been violently rejected by the S&P 500. Credit Suisse analysts anticipate a retest of crucial support from the 200-week average at 3620/19.
From the late-September peak, the S&P 500 has had a sharp sell-off with rising volume, a declining 63-day average, and a 50% retracement of the decline from September at 3902/12.
Although we would see this rejection further confirmed if sustained after the payrolls report this Friday, the magnitude of the rejection and break of near-term support at 3804 is seen to reinforce our core view recent strength has been a corrective bear market rally only, with an important peak now in place.
The next level of support is the 38.2% retracement of the October/November rise at 3751, below which a decline to the next level of support is expected at the late-October low of 3652/47, followed by a retest of the important 200-week average at 3620/19.
Initial resistance is indicated at 3802/04, with 3840 serving as a good cap to reduce the immediate risk. The 3894/3912 zone, however, is undoubtedly anticipated to remain a significant barrier.
