FXStreet notes that the S&P 500 maintains a bearish “reversal day” and the index shows potential to form a small “head and shoulders” top if the market can close below 3198, which would reinforce the Credit Suisse analyst team bias for a short term phase of risk-off.

“A small bearish ‘outside day’ yesterday increases the risk to see the construction of a ‘right-hand shoulder’ to a small potential ‘head and shoulders’ top, with the market also still maintaining a bearish ‘reversal day’ from late last week and with the Nasdaq 100 also seen at risk of a ‘double top’ following its own bearish ‘reversal day’.”

“Key near-term support stay seen at its 13-day average at 3215, with a break below 3200/3198 still needed to confirm the aforementioned top. This would then open the door to a swing lower within the broader sideways range with support seen next at 3173, ahead of 3154 and then more importantly 3116.”

“Resistance is seen at 3233 initially, with a move above 3244/48 needed to ease the topping threat and see a move back to 3266. Above 3279/81 though is needed to reassert an upward bias again, with the top of the February gap seen at 3328/38.”