Short-Term Forecast For Thursday, Aug. 6

We are 9 sessions into the beta phase rally of the short-term cycle that began on June 27.

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An extended beta phase rally that moves up to significant new highs would reconfirm the current bullish short-term trend and forecast additional gains. Alternatively, a quick reversal followed by an extended beta phase decline that moves well below the last short-term cycle low (STCL) at 3,009 would signal the likely transition to a bearish short-term trend.

S&P 500 Index Daily Chart Analyses

The following technical and cycle analyses provide short-term forecasts for the S&P 500 index. 

Technical Analysis

The index closed moderately higher today, moving up to a new high for the uptrend from March. Technical indicators are bullish overall, strongly favoring a continuation of the advance.

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Cycle Analysis

We are 9 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on June 26. An extended beta phase rally that moves up to significant new highs would reconfirm the current bullish translation and forecast additional gains. Alternatively, a quick reversal followed by an extended beta phase decline that moves well below the last STCL at 3,009 would signal the likely transition to a bearish translation. The window during which the next STCL is likely to occur is from August 7 to August 27, with our best estimate being in the August 18 to August 24 range.

• Last STCL: June 26, 2020
• Cycle Duration: 27 sessions
• Cycle Translation: Bullish
• Next STCL Window: August 7 to August 27; best estimate in the August 18 to August 24 range.

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

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Short-term Outlook

• Bullish Scenario: A close above current levels would reconfirm the uptrend from March and forecast additional gains.
• Bearish Scenario: A reversal and close below the middle of the Bollinger bands at 3,248 would predict a return to the 50-day moving average at 3,164.

The bullish scenario is more likely (~70 probable).