A cycle low signal was generated today, indicating that a new short-term cycle has likely begun. We are 1 session into the alpha phase rally of the short-term cycle that began today.
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The magnitude and duration of the last beta phase decline reconfirm the current bearish short-term trend and favor additional short-term weakness during the next decline phase.
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 sharply higher today, reacting off of recent lows of the violent downtrend from February. Technical indicators are moderately bearish overall, favoring a continuation of the decline.
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Cycle Analysis
A cycle low signal was generated today, indicating that the latest short-term cycle low (STCL) likely formed on March 23. We are 1 session into the alpha phase rally of the cycle following the STCL on March 23. The magnitude and duration of the last 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 from May 4 to May 22, with our best estimate being in the May 14 to May 20 range.
- Last STCL: March 23, 2020
- Cycle Duration: 1 session
- Cycle Translation: Bearish
- Next STCL Window: May 4 to May 22; best estimate in the May 14 to May 20 range.
- Setup Status: Cycle low setup occurred on March 18.
- Trigger Status: Cycle low trigger occurred today.
- Signal Status: Cycle low signal was generated today.
- Stop Level: None active.
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Short-term Outlook
- Bullish Scenario: A close well above current levels would predict a move up toward the middle of the Bollinger bands at 2,727.
- Bearish Scenario: A reversal and close below the recent short-term low at 2,237 would reconfirm the downtrend from February and forecast additional losses.
The bullish scenario is highly likely (>80 probable).
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