The S&P 500 index is severely oversold after the massive decline in late February. Additionally, the latest intermediate-term low will likely form sometime during the next 3 weeks, if it has not already occurred during the week ending Feb. 28.
A quick rebound followed by a move up to new highs would reconfirm the current bullish trend and favor additional intermediate-term strength. Alternatively, an extended decline phase that moves well below the last intermediate-term cycle low (ITCL) at 2,855 would signal the likely transition to a bearish trend.
S&P 500 Index Weekly Chart Analyses
The following technical and cycle analyses provide intermediate-term forecasts for the S&P 500 index.
The index closed slightly higher this week, holding near recent short-term lows, and continuing a test of congestion support in the 2,950 area. Technical indicators are neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.
We are 3 weeks into the decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending Oct. 11. A quick rebound followed by a move up to new highs would reconfirm the current bullish translation, and favor additional intermediate-term strength. Alternatively, an extended decline phase that moves well below the last ITCL at 2,855 would signal the likely transition to a bearish translation. The window during which the next ITCL is likely to occur is now through March 27.
- Last ITCL: October 11, 2019
- Cycle Duration: 21 weeks
- Cycle Translation: Bullish.
- Next ITCL Window: Now through March 27.
- Setup Status: No active setups.
- Trigger Status: No pending triggers.
- Signal Status: No active signals.
- Stop Level: None active.
Intermediate-term Outlook
- Bullish Scenario: A rebound and weekly close above the previous high at 3,380 would reconfirm the uptrend from December and forecast additional gains.
- Bearish Scenario: A weekly close well below congestion support in the 2,950 area would reconfirm the downtrend from late February and predict additional losses.
Both scenarios are equally likely.
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