S&P 500 has extended its rally as looked for to retest the record high at 4546. Whilst a fresh setback from here should be allowed for, analysts at Credit Suisse continue to look for a sustained break to new highs in due course. The risk barometer takes clues from the hawkish comments of the US Federal Reserve (Fed) policymakers and updates surrounding China’s struggling reality firm Evergrande to print mild losses, the first in the last six days.

Tapering signals from Federal Reserve Governor Randal Quarles and Cleveland Fed President Loretta Mester have been the latest to pump the US 10-year Treasury yields, probing the equity bulls. That said, the US 10-year Treasury yields remain firm around 1.66%, up two basis points (bps) to refresh the highest levels since May.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES : (TECHNICALS)

The steady move higher in the S&P 500 has extended as looked for to just shy of the 4546 record high. Given the importance of 4546 a fresh pause here should be allowed for, but our core view remains bullish and we continue to look for a clear break to new highs in due course. The support level is now at 4,485-4,500, marked by the yesterday’s daily gap up of 4,488.75-4,496.41 and the previous resistance level. The next support level is at 4,440-4,450, marked by the last Friday’s daily gap up of 4,439.73-4,447.69. On the other hand, the resistance level is at 4,525-4,555, marked by the previous local highs and the early September topping pattern. The S&P 500 extends its advance after breaking above a month-long downward trend line, as we can see on the daily chart.

S&P500 Near All Time Highs

Oct 21 2021