Stock Market Commentary

We are 9 sessions into the alpha phase rally of the short-term cycle that began on September 24.

A quick reversal followed by an extended alpha phase decline that moves down to new lows would reconfirm the current bearish short-term trend and forecast additional losses. Alternatively, an extended alpha phase rally that moves well above the last beta high (BH) at 3,411 on the S&P 500 would suggest that short-term direction is in question.

S&P 500 Index Daily Chart Analyses

Technical Analysis

The index closed sharply lower today, retreating from recent short-term highs above previous lows of the downtrend from early September. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 9 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on September 24. A quick reversal followed by an extended alpha phase decline that moves down to new lows would reconfirm the current bearish translation and forecast additional losses. Alternatively, an extended alpha phase rally that moves well above the last beta high (BH) at 3,411 would suggest that cycle translation is in question. The window during which the next STCL is likely to occur is from November 3 to November 23, with our best estimate being in the November 13 to November 19 range.

• Last STCL: September 24, 2020
• Cycle Duration: 9 sessions
• Cycle Translation: Bearish
• Next STCL Window: November 3 to November 23; best estimate in the November 13 to November 19 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 3,409 predict a move up toward the previous short-term high at 3,581.
• Bearish Scenario: A reversal and close below the previous short-term low at 3,226 would reconfirm the downtrend from early September and forecast additional losses.

Both scenarios are equally likely.