Short-Term Forecast For Wednesday, Aug. 19

We are 18 sessions into the beta phase rally of the short-term cycle that began on June 27. The beta high (BH) of the current cycle is overdue and it could form at any time, if it has not already occurred on August 18.

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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 lower today, retreating from recent highs of the uptrend from March. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

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Cycle Analysis

We are 18 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on June 26. The beta high (BH) is overdue and it could form at any time, if it has not already occurred on August 18. 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 now through August 31, with our best estimate being in the August 25 to August 31 range.

• Last STCL: June 26, 2020
• Cycle Duration: 36 sessions
• Cycle Translation: Bullish
• Next STCL Window: Now through August 31; best estimate in the August 25 to August 31 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 well above the recent high at 3,393 would reconfirm the uptrend from March and forecast additional gains.
• Bearish Scenario: A reversal and close below the middle of the Bollinger bands at 3,314 would predict a return to the 50-day moving average at 3,209.

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