Short-term Forecast for March 21, 2018

| March 21, 2018

Stock Market Commentary

The S&P 500 index closed slightly lower today, holding below support at the lower boundary of the short-term uptrend from February. Following the breakout from the symmetrical triangle formation in early March, stocks have moved lower. Sustained weakness following a strong move out of a symmetrical triangle formation is highly unusual, suggesting that short-term direction remains in question.

A quick rebound followed by a move above the 2,800 level would forecast a return to the previous high in January. Alternatively, a daily close well below uptrend support near 2,733 would predict a move down toward congestion support in the 2,575 area.

S&P 500 Index Daily Chart Analyses

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

Technical Analysis

The index closed slightly lower today, continuing a test of support at the lower boundary of the uptrend from February. Technical indicators are neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.

Cycle Analysis

We are 7 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on February 8. An extended beta phase decline that moves below the last STCL at 2,532 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, a quick rebound followed by an extended alpha phase rally that moves above the last beta high (BH) at 2,792 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from March 22 to April 12, with our best estimate being in the March 23 to March 29 range.

  • Last STCL: February 8, 2018
  • Cycle Duration: 28 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: March 22 to April 12; best estimate in the March 23 to March 29 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 rebound and close above the recent short-term high at 2,792 would forecast a move up to the previous long-term high at 2,873.
  • Bearish Scenario: A close well below current levels would predict a move down toward congestion support at the 2,575 level.

The bearish scenario is slightly more likely (~60% probable).

Category: Forecasts, Short-term Forecasts

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