We are 15 sessions into the alpha phase rally of the short-term cycle that began on June 27. The alpha high (AH) of the current cycle is imminent and it could form at any time.

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An extended alpha phase rally that moves up to new highs would reconfirm the current bullish short-term trend and forecast additional gains. Alternatively, a quick reversal followed by an extended alpha 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 higher today, moving up to a new high for the uptrend from March. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

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Cycle Analysis

We are 15 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on June 26. The alpha high (AH) is imminent and it could form at any time. An extended alpha phase rally that moves up to new highs would reconfirm the current bullish translation and forecast additional gains. Alternatively, a quick reversal followed by an extended alpha 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 from August 7 to August 27, with our best estimate being in the August 19 to August 25 range.

• Last STCL: June 26, 2020
• Cycle Duration: 15 sessions
• Cycle Translation: Bullish
• Next STCL Window: August 7 to August 27; best estimate in the August 19 to August 25 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 current levels would reconfirm the uptrend from March and forecast additional gains.
• Bearish Scenario: A reversal and close well below congestion support in the 3,000 area would confirm the start of a new downtrend and predict additional losses.

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