S&P 500 is on course for a move to new record high above 3394 – Credit Suisse
12.08.2020, 09:39

S&P 500 is on course for a move to new record high above 3394 – Credit Suisse

FXStreet reports that the S&P 500 is already approaching its 3394 record high from February. The Credit Suisse analyst team sees scope for an overshoot to 3432/36 but with the 3432/36 capping at first for a consolidation phase. What’s more, the VIX has finally removed a cluster of key supports around 24 and look for a return to more “normal” conditions.

“S&P 500 has extended its defence of high-level support at 3200/3198 for a break with ease above the top of the February gap at 3328/38, and is on course for a challenge on the 3394 record high. We see scope for an overshoot to Fibonacci projection resistance at 3432/36, but with the market already at the beginning of its ‘typical’ extreme (10% above the 200-day average), we would look for 3432/36 to then ideally cap for a consolidation phase. Should strength directly extend, the upper end of the ‘typical’ extreme is currently at 3517.”

“Support at 3271 needs to hold to keep the immediate risk higher. A break would suggest a corrective/consolidation phase is underway, with support next at 3204/00 and more importantly at the 200-day average at 3056.”

“80% of S&P 500 stocks are above their medium-term 63-day average, still well below the extreme seen earlier this year. Only 58% of S&P 500 stocks are above their long-term 200-day average still highlighting a neutral condition.”

“The VIX has removed key support from the top of its 2019 range at 24.81/23.54, opening the door to more ‘normal’ conditions with support seen at 20 next, then 18.21.”

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