Stock Market Commentary

The decline today indicates that the beta high (BH) of the current short-term cycle likely formed on December 9. We are 2 sessions into the beta phase decline of the short-term cycle that began on November 1.

S&P 500 Index Daily Chart AnalysesThe magnitude and duration of the last alpha phase decline signal the likely transition to a bullish short-term trend.

Technical Analysis

The index closed slightly lower today, holding below recent highs of the uptrend from March. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

The decline today indicates that the beta high (BH) likely formed on December 9. We are 2 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on November 1. The magnitude and duration of the last alpha phase decline signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from December 11 to December 31, with our best estimate being in the December 17 to December 23 range.

• Last STCL: November 1, 2020
• Cycle Duration: 27 sessions
• Cycle Translation: Bullish
• Next STCL Window: December 11 to December 31; best estimate in the December 17 to December 23 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 recent short-term high at 3,706 would reconfirm the uptrend from March and forecast additional gains.
• Bearish Scenario: A close well below the middle of the Bollinger bands at 3,630 would predict a return to the 50-day moving average at 3,512.

Both scenarios are equally likely.