Short-Term Forecast For Monday, Dec. 7

Stock Market Commentary

We are 9 sessions into the beta phase rally of the short-term cycle that began on November 1.

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The magnitude and duration of the last alpha phase decline signal the likely transition to a bullish 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 higher today, moving up to a new high for the uptrend from March. Technical indicators are bullish overall, strongly favoring a continuation of the advance.

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Cycle Analysis

We are 9 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on November 1. The magnitude and duration of the last alpha phase decline signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from December 11 to December 31, with our best estimate being in the December 18 to December 24 range.

  • Last STCL: November 1, 2020
  • Cycle Duration: 23 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: December 11 to December 31; best estimate in the December 18 to December 24 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 above current levels would reconfirm the uptrend from March and forecast additional gains.
  • Bearish Scenario: A reversal and close below the middle of the Bollinger bands at 3,602 would predict a return to the 50-day moving average at 3,485.

The bullish scenario is more likely (~70 probable).

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