S&P 500 Index: Choppier phase of strength while above 3899/97 – Credit Suisse

Economists at Credit Suisse believe the S&P 500 is now in a choppier phase of the bull trend. Thus, the index is likely to see a lot more “back and fill” on the way to the 4070/75 neighborhood, with interim resistance at 3975/80 likely to prove tough.

See – S&P 500 Index: Bull market is intact but the correction has further to go – Morgan Stanley

Key quotes

“With US Inflation Breakevens breaking key resistance where we continue to see a strong positive correlation with the US equity market, our bias is to continue to look for the uptrend to directly extend. We would stress though that we remain of the view the next phase of strength is likely to be a more choppy trend higher.” 

“Whilst support at 3899/97 holds the immediate risk should stay higher for a move back to 3960, then what we look to be tougher initial resistance at 3975/80, from which we will look for a fresh pullback.” 

“Big picture, we continue to look for a move in due course to 4070/75.” 

“Near-term support moves to 3916. Below 3899/97 would warn of a ‘false’ break to a new high and a fresh pullback in the range to test support next at 3875/70, but with fresh buyers expected here.”