We are 5 sessions into the alpha phase rally of the short-term cycle that began on June 27.

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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 sharply higher today, moving up toward previous highs of the uptrend from March. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the advance.

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Cycle Analysis

We are 5 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on June 26. 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 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: 5 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 above the previous short-term high at 3,232 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 slightly more likely (~60 probable).