S&P 500 Index to be affected by a Nasdaq bearish reversal week – Credit Suisse

S&P 500 has again been capped at the 3233 June high and further consolidation is seen likely but with support at 3156/54 ideally holding a fresh pullback. The Credit Suisse analyst team also notes that a Nasdaq reversal week would impact the S&P 500 Index.

Key quotes

“With China weakening sharply overnight and with the Nasdaq 100 still holding a bearish ‘reversal day’ we suspect this 3233/38 resistance stays intact for now. Indeed, what we think is critical for US equity markets for the rest of this week is whether the Nasdaq 100 completes a more important bearish ‘reversal week’, which would then be seen impacting the S&P 500 also.”

“Immediate support is seen from the price gap from yesterday morning at 3201/3198, below which can see support next at 3166, but with our bias for support at 3156/54 to ideally hold further weakness for an eventual clear break above 3233/38 to see a challenge on the bottom of the February ‘pandemic’ gap at 3260. Above here and we see resistance next at 3288.” 

“Below 3154 can see weakness extend back to 3128, but with a break below 3116/13 needed to mark a top to warn of a more concerted correction lower within the broader range.”