We are 11 sessions into the beta phase decline of the short-term cycle that began on February 3. A cycle low setup occurred on March 18, suggesting that the latest short-term cycle low (STCL) may have formed on March 18. A close above 2,529 on the S&P 500 index during the next session would generate a cycle low signal and indicate that the next short-term cycle is likely in progress.
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The magnitude and duration of the current beta phase decline reconfirm the current bearish short-term trend and favor additional short-term weakness.
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 slightly higher today, holding near recent lows of the violent downtrend from February. Technical indicators are bearish overall, strongly favoring a continuation of the decline.
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Cycle Analysis
We are 11 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on January 31. A cycle low setup occurred on March 18, suggesting that the latest STCL may have formed on March 18. A close above 2,529 on the S&P 500 index during the next session would generate a cycle low signal and indicate that the next cycle is likely in progress. The magnitude and duration of the current beta phase decline reconfirm the bearish translation and favor additional short-term weakness. The window during which the next STCL is likely to occur is now through April 2, with our best estimate being now through March 20.
- Last STCL: January 31, 2020
- Cycle Duration: 32 sessions
- Cycle Translation: Bearish
- Next STCL Window: Now through April 2; best estimate now through March 20.
- Setup Status: Cycle low setup occurred on March 18.
- Trigger Status: Cycle low trigger is pending from March 18, requiring a close above 2,529 during the next session to generate a cycle low signal.
- Signal Status: No active signals.
- Stop Level: None active.
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Short-term Outlook
- Bullish Scenario: A rebound and close well above the recent short-term high at 2,529 would predict a move up toward the middle of the Bollinger bands at 2,862.
- Bearish Scenario: A close below the recent short-term low at 2,386 would reconfirm the downtrend from February and forecast additional losses.
Both scenarios are equally likely.
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