Stock Market Commentary

We are 13 sessions into the alpha phase rally of the short-term cycle that began in early October. The alpha high (AH) of the current cycle will likely form sometime during the next 3 sessions.

A quick reversal followed by an extended alpha phase decline that moves below the short-term low in August at 2,840 would reconfirm the current bearish trend and favor additional short-term weakness. Alternatively, an extended alpha phase rally that moves up to new highs would signal the likely transition to a bullish short-term trend.

S&P 500 Index Daily Chart Analyses

Technical Analysis

The index closed moderately higher today, moving up toward previous long-term highs. A symmetrical triangle is developing, and a close well outside of this formation will predict short-term direction with a high degree of statistical confidence. Technical indicators are slightly bullish overall, tentatively favoring a return to long-term highs.

Cycle Analysis

We are 13 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on October 2. The alpha high (AH) will likely form sometime during the next 3 sessions. A quick reversal followed by an extended alpha phase decline that moves below the STCL in August at 2,840 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended alpha phase rally that moves up to new highs would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from November 12 to December 3, with our best estimate being in the November 22 to November 29 range.

• Last STCL: October 2, 2019
• Cycle Duration: 13 sessions
• Cycle Translation: Bearish
• Next STCL Window: November 12 to December 3; best estimate in the November 22 to November 29 range.

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

Short-term Outlook

• Bullish Scenario: A close well above the upper boundary of the symmetrical triangle formation near 2,998 would reconfirm the uptrend from August and forecast additional gains.
• Bearish Scenario: A reversal and close below the lower boundary of the symmetrical triangle formation near 2,902 would predict a move down to congestion support at the 2,850 level.

The bullish scenario is slightly more likely (~60 probable).