Potential Short-term Signal: Stock Market Cycle Analysis

| January 30, 2018

The 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 2,835 on the S&P 500 index today would generate a cycle high signal and indicate that the alpha high (AH) of the current short-term cycle likely formed on January 26. Even if a confirmed cycle high signal is not generated today, given that the AH is several sessions overdue, it is likely that the alpha phase decline is now in progress. Only a strong rally into the close today that returns the S&P 500 index to recent highs would suggest that the alpha phase rally is still in progress.

The magnitude and duration of the current alpha phase rally reconfirms the current bullish translation and favors additional short-term strength.

Category: Signals, Stocks

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