Short-Term Forecast For Monday, Sept. 30

Stock Market Commentary

We are 12 sessions into the alpha phase decline of the short-term cycle that began in late August.

An extended alpha phase decline that moves below the last short-term cycle low (STCL) at 2,840 would reconfirm the current bearish trend and favor additional short-term weakness. Alternatively, a quick rebound followed by a move up to new highs would signal the likely transition to a bullish short-term trend.

S&P 500 Index Daily Chart Analyses

Technical Analysis

The index closed moderately higher today, reacting off of recent short-term lows below previous highs of the uptrend from June. Technical indicators are slightly bullish overall, tentatively favoring a return to previous highs of the advance.

Cycle Analysis

We are 12 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on August 23. An extended alpha phase decline that moves below the last STCL at 2,840 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, a quick rebound followed by a move up to new highs would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from October 4 to October 24, with our best estimate being in the October 17 to October 23 range.

Last STCL: August 23, 2019
Cycle Duration: 25 sessions
Cycle Translation: Bearish
Next STCL Window: October 4 to October 24; best estimate in the October 17 to October 23 range.

Setup Status: No active setups.
Trigger Status: No pending triggers.
Signal Status: No active signals.
Stop Level: None active.

Short-term Outlook

Bullish Scenario: A rebound and close above the previous long-term high at 3,026 would reconfirm the uptrend from August and forecast additional gains.
Bearish Scenario: A close below the recent short-term low at 2,962 would predict a return to congestion support at the 2,940 level.

The bullish scenario is slightly more likely (~60 probable).