FXStreet reports that strategists at Credit Suisse will be watching the close of the S&P 500 as if the index falls below 3013 would reinforce the near-term trend lower to correct the strong rally of the past three months.

“The close today is seen as critical as to whether we are indeed set for a correction lower as if a close below 3013 is seen today this would not only see the market below its 200-day average but would also see an important bearish ‘key-reversal week’ established. This would then reinforce the view the near-term trend has indeed turned lower with support seen at 2970 next, 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.” 

“A close above 3027/32 today would remove the threat of a ‘reversal week’ to instead suggest we are likely to see a high-level consolidation phase, with resistance next at 3090/94, then the beginning of yesterday’s gap at 3124.”