S&P 500 has seen a further strong recovery post the FOMC to turn the spotlight on the 4308 recent high. Despite the recent strength, only a close above here would see a base complete to maintain the positive tone, analysts at Credit Suisse report.

Failure to close above 4308 on Friday would see a ‘reversal week’ avoided

“We see a key inflection point at the high of last week at 4308. For a more constructive tone, it is vital to see a quick followthrough to the upside following yesterday’s strength.” 

“If a close above 4308 can be achieved on Friday this would not only see a near-term base complete but also a bullish ‘reversal week’, which we would look to then provide the platform for a deeper albeit still corrective rally. We would then see resistance next at the 38.2% retracement of the YTD fall at 4341/51, then price, gap and 63-day average resistance at 4370/94.”

“Failure to close above 4308 at the end of this week would see a ‘reversal week’ avoided. Below support at 4200 though is needed to ease the immediate upside bias and below 4153/49 to turn the broader risk lower again for a fall back to 4115.”