S&P 500 maintains a bullish “Marubozu” breakout above key resistance at 4091/28. Thus, analysst at Cerdit Suisse stay biased towards a deeper corrective move higher, with next key resistance at 4278/4314.

Short-term support at 4091/51 expected to hold

“S&P 500 posted a bullish “Marubozu” breakout on Friday above the price high and gap at 4091/4128, which confirms a short-term base to signal a more profound recovery, supported by the turn higher in daily MACD momentum.”

“We expect the market to extend the recovery to the 63-day average at 4272/4314, where we would be alert to a potential cap. At most, we can see the recovery extending towards the 200-day average and potential downtrend from the 2022 high at 4453/4510, however we have more confidence in a cap here.” 

“We view this short-term recovery as corrective in nature, with the medium-term picture still pointing towards an eventual turn back lower. For now though, near-term support is seen at the recent ‘breakaway gap’ at 4091/51, which we look to hold to maintain the near-term upward pressure.”