We are 10 sessions into the beta phase decline of the short-term cycle that began on February 3. A cycle low setup occurred today, suggesting that the latest short-term cycle low (STCL) may have formed today. 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 of the current beta phase decline reconfirms the current bearish short-term trend and favors 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 sharply lower today, returning to 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 10 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on January 31. A cycle low setup occurred today, suggesting that the latest STCL may have formed today. 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 of the current beta phase decline reconfirms the bearish translation and favors 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 19.
- Last STCL: January 31, 2020
- Cycle Duration: 31 sessions
- Cycle Translation: Bearish
- Next STCL Window: Now through April 2; best estimate now through March 19.
- Setup Status: Cycle low setup occurred today.
- Trigger Status: Cycle low trigger is pending from today, 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 above congestion resistance in the 2,750 area would predict a move up to the middle of the Bollinger bands at 2,910.
- 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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