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S&P 500 Index In Steep Correction; Credit Suisse Sees Potential Bottom At 3761

The S&P 500 index is leading the major US equity indices in red territory, as a risk-averse environment sweeps the markets. As of the time of writing, the S&P 500 was down 0.97% at 3,839.9, weighed down by a 2.5% plunge in the Technology Index. Furthermore, the Consumer Discretionary Index is also down more than 3%. The 3.6% gain in the energy index, as well as the gains in the Utilities and Real Estate Indices of the S&P 500, were not enough to keep the index up. 

Analysts at Credit Suisse are seeking a corrective move towards 3819 on the strength of the head & shoulders topping pattern on the daily chart. The team also sees the potential for the attainment of 3792/3774, with the correction bottoming out at 3761 before the core uptrend continues. 

Technical Levels to Watch

The chart below shows the head and shoulders formation, with the neckline at 3870.0 and projected measured move that potentially targets the 3800.7 psychological support. This move could have a potential pitstop at 3823.9. If the decline continues below this point, then 3765.1 comes into the picture, along with 3721.2. 

On the flip side, fresh demand at 3765.1 or 3721.2 allows the S&P 500 index the chance at retesting 3823.9, with 3870.0 coming into the picture as well. The resumption of the uptrend depends on the price ascending beyond 3950.1, taking out the 3900 psychological resistance (22/23 February tops) as well.

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S&P 500 Index; Daily Chart

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