The sharp decline today indicates that the beta high (BH) of the current short-term cycle likely formed on September 16. We are 4 sessions into the beta phase decline of the cycle that began on August 20.

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The magnitude of the current beta phase decline signals 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 lower today, moving down to a new low for the downtrend from early September. Technical indicators are moderately bearish overall, favoring a continuation of the decline.

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Cycle Analysis

The sharp decline today indicates that the beta high (BH) of the current cycle likely formed on September 16. We are 4 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on August 20. The magnitude of the current beta phase decline signals the likely transition to a bearish translation. The window during which the next STCL is likely to occur is from September 30 to October 20, with our best estimate being in the September 30 to October 6 range.

• Last STCL: August 20, 2020
• Cycle Duration: 22 sessions
• Cycle Translation: Bearish
• Next STCL Window: September 30 to October 20; best estimate in the September 30 to October 6 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 well above the middle of the Bollinger bands at 3,419 would predict a return to the previous short-term high at 3,581.
• Bearish Scenario: A close below current levels would reconfirm the downtrend from early September and forecast additional losses.

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