S&P 500 Index: scope for the October 2021 lows at 4290/79 – Credit Suisse

The S&P 500 saw an aggressive fall of 5.7% last week and this leaves the market nearly down 9% from its 2021 record high. The weekly close below the 200-day moving average (DMA) at 4429 warns of further weakness to 4345, with scope for the October 2021 lows at 4290/79, analysts at Credit Suisse report.

VIX set to soar towards 35.00

“The S&P 500 closed the week below our corrective of its long-term 200-DMA, currently at 4429, reinforcing its existing top below 4582. With weekly RSI momentum also holding a major top, we look for further weakness yet.” 

“Below the 78.6% retracement of the rally from last October at 4396 can see support next at a small price gap from last October at 4387/64, then potential trend/”neckline” support at 4345.” 

“We see scope for a move below 4345 to test the key lows of last October at 4290/79, but we look for an attempt to find a floor above here. Below 4279 though would mark a further deterioration with support then seen next at the 38.2% retracement of the rally from October 2020 at 4213.” 

“Resistance is seen at 4426/29 initially, then 4455 with the immediate risk seen staying lower whilst below 4495.”

“VIX above 27.40 warns of a further rise to 35.00.”