The S&P 500 Index has gapped sharply lower on increased volume. Analysts at Credit Suisse continue to look for further corrective weakness and a fall back to 4306/01 and ideally 4238/30.

Resistance is seen at 4383 initially

“We look for a clear break of near-term support at 4348 for a fall to 4318, then a retest of the recent low and 78.6% retracement of the July/September rally at 4306/01. 

“Our bias is for a break below 4306/01 in due course for a fall to 4262/58 next, then what we look to still ideally be better support at 4244/30 – the July low, May high and 23.6% retracement of the bull leg from last September. We would look for an attempt to find a floor here.”

“Resistance is seen at 4383 initially, then 4398, with the price gap from yesterday morning and 63-day average at 4420/44 now ideally capping.”