Stock Market Struggles to Rebound

| June 24, 2011

The S&P 500 index closed sharply lower today, moving down toward recent lows of the violent decline from early May near critical congestion support in the 1,260 area.

Since the beta low (BL) of the current short-term cycle formed on June 16, the index has tracked the bearish scenario that we outlined earlier this month. The alpha phase of this cycle exhibited an extremely bearish translation and the sharp decline during the last three sessions indicates that the beta phase may follow a similar pattern.

Additional weakness or sideways consolidation during the next several sessions would signal that the beta high (BH) has formed already, after which a close well below the BL would reconfirm left translation and forecast additional losses heading into the next short-term cycle low (STCL) in July.

Category: Commentary, Market Update

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