Stock Market Commentary

We are 4 weeks into the second rally phase of the intermediate-term cycle that began in August.

A move up to new highs would reconfirm the current bullish trend and favor additional intermediate-term strength. Alternatively, a quick reversal followed by an extended decline phase that returns to the last intermediate-term cycle low (ITCL) at 2,847 on the S&P 500 index would suggest that intermediate-term direction is in question.

S&P 500 Index Weekly Chart Analyses

Technical Analysis

The index closed moderately higher this week, moving up to a new high for the uptrend from December. Technical indicators are bullish overall, strongly favoring a continuation of the advance.

Cycle Analysis

We are 4 weeks into the second rally phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending August 23. A move up to new highs would reconfirm the current bullish translation and favor additional intermediate-term strength. Alternatively, a quick reversal followed by an extended decline phase that returns to the last ITCL at 2,847 would suggest that intermediate-term direction is in question. The window during which the next ITCL is likely to occur is from December 27 to February 21, with our best estimate being in the January 17 to February 14 range.

• Last ITCL: August 23, 2019
• Cycle Duration: 10 weeks
• Cycle Translation: Bullish
• Next ITCL Window: December 27 to February 21; best estimate in the January 17 to February 14 range.

• Setup Status: No active setups.
• Trigger Status: No pending triggers.
• Signal Status: No active signals.
• Stop Level: None active.

Intermediate-term Outlook

• Bullish Scenario: A weekly close above current levels would reconfirm the uptrend from December and forecast additional gains.
• Bearish Scenario: A reversal and weekly close well below support at the lower boundary of the uptrend from December near 2,950 would predict a move down to the bottom of the Bollinger bands at 2,868.

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