Stock Market Commentary
The sharp decline today indicates that the current short-term cycle likely began in early August. We are 13 sessions into the beta phase decline of the current short-term cycle.
An extended beta 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 sharply lower today, moving down to a new short-term low below previous highs of the uptrend from June. Technical indicators are slightly bearish overall, tentatively favoring a continuation of the decline from September.
Cycle Analysis
We are 13 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on August 5. An extended beta 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 now through October 3.
- Last STCL: August 5, 2019
- Cycle Duration: 40 sessions
- Cycle Translation: Bearish
- Next STCL Window: Now through October 3.
- 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 well below congestion support at the 2,940 level would reconfirm the downtrend from September and predict additional losses.
Both scenarios are equally likely.
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