We are 9 sessions into the beta phase rally of the short-term cycle that began on March 24. The beta high (BH) of the current cycle may have formed on April 29. A close below 2,815 on the S&P 500 index during the next session would generate a cycle high signal and indicate that the beta phase decline of the current cycle is likely in progress.

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An extended beta phase decline that moves below the last short-term cycle low (STCL) at 2,191 would reconfirm the current bearish trend and forecast additional losses. Alternatively, an extended beta phase rally that moves well above the last alpha high (AH) at 2,875 would 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 slightly higher today, holding below previous highs of the uptrend from March. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

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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 March 23. The beta high (BH) may have formed on April 29. A close below 2,815 during the next session would generate a cycle high signal and indicate that the beta phase decline is likely in progress. A quick reversal followed by an extended beta phase decline that moves below the last STCL at 2,191 would reconfirm the current bearish translation and forecast additional losses. Alternatively, an extended beta phase rally that moves well above the last alpha high (AH) at 2,875 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is now through May 22, with our best estimate being in the May 14 to May 18 range.

• Last STCL: March 23, 2020
• Cycle Duration: 29 sessions
• Cycle Translation: Bearish
• Next STCL Window: Now through May 22; best estimate in the May 14 to May 18 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 rebound and close above the recent short-term high at 2,940 would reconfirm the uptrend from March and forecast a move up to congestion resistance in the 3,000 area.
• Bearish Scenario: A close below the middle of the Bollinger bands at 2,809 would predict a move down to the bottom of the Bollinger bands at 2,668.

Both scenarios are equally likely.