Intermediate-term Forecast for July 6, 2019

| July 5, 2019

Stock Market Commentary

We are 5 weeks into the rally phase of the intermediate-term cycle that began in early June.

Intermediate-term cycle direction is in question. A quick reversal followed by an extended decline phase that moves below the intermediate-term cycle low (ITCL) in December at 2,347 would reconfirm the current bearish trend and forecast additional losses. Alternatively, an extended rally phase that moves well above the intermediate-term cycle high (ITCH) in April at 2,946 would signal the likely transition to a bullish trend.

S&P 500 Index Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the S&P 500 index. For short-term outlooks, see the latest short-term forecast.

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 5 weeks into the rally phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending May 31. Cycle translation is in question. A quick reversal followed by an extended decline phase that moves below the ITCL in December at 2,347 would reconfirm the current bearish translation and favor additional intermediate-term weakness. Alternatively, an extended rally phase that moves well above the intermediate-term cycle high (ITCH) in April at 2,946 would signal the likely transition to a bullish translation. The window during which the next ITCL is likely to occur is from September 27 to November 29, with our best estimate being in the October 25 to November 22 range.

  • Last ITCL: May 31, 2019
  • Cycle Duration: 5 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: September 27 to November 29; best estimate in the October 25 to November 22 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 below the middle of the Bollinger bands at 2,867 would predict a move down toward the bottom of the Bollinger bands at 2,733.

The bullish scenario is highly likely (>80% probable).

Category: Forecasts, Intermediate-term Forecasts


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