Potential Short-term Signal: Stock Market Cycle Analysis

| August 2, 2016

The sharp decline today has caused both short-term cycle oscillators to experience bearish crossovers and a bearish engulf pattern has formed on the daily chart. A close below 2,166 on the S&P 500 index today would generate a cycle high signal and confirm that the alpha high (AH) of the current short-term cycle formed on July 22.

Cycle translation is in question. An extended alpha phase decline that moves below the last short-term cycle low (STCL) at 1,992 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, a brief, shallow alpha phase decline followed by an extended beta phase rally that moves above the developing AH at 2,175 would signal the likely transition to a bullish translation.

Category: Signals, Stocks

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