- Summary:
- The S&P 500 index is stuck just below 4,000 as rising long-term bond yields continue to draw capital from the US stock markets into the bond market.
Credit Suisse is predicting that the S&P 500 index could see a fresh pullback from the resistance at 3980/84, despite an earlier call for the uptrend to keep running until 4070/75. However, a greater pullback would be on the cards if the bond yields keep rising.
Fundamentally, there is no change in the outlook provided by Credit Suisse, which was covered here last week. However, US real bond yields surged heavily overnight, keeping the bank’s short-term support at 3954/3950. 3915 is projected to be the deeper support level if the pullback becomes more extensive. 3899/97, then 3875 have also been mentioned by the bank as potential supports if the price is unable to hold at 3899/3897.
The bank’s pivot for the resumption of the uptrend is a close above 3984, then 4000, and finally 4025, in that order.
Technical Levels to Watch
The daily chart shows the S&P 500 index trading lower, but the decline below 3950.4 has been stopped. As long as this support holds, then there is a chance that the S&P 500 index could target the 4005.9 level initially (161.8% Fibonacci extension).
On the other hand, all it takes for the price to tank below 3800 is for the price to break down 3950.4, 3870.0, and 3823.9, in that order. 3721.2 is key support. If it gives way, then the S&P 500 index goes to the 22 December 2020 lows at 3645.4.
S&P 500 Daily Chart
