Short-term Forecast for March 22, 2018

| March 22, 2018

Stock Market Commentary

The stock market is 8 sessions into the beta phase decline of the short-term cycle from early February. The violent character of recent moves during the past two months suggests that short-term direction remains in question.

An extended beta phase decline that moves below the last short-term cycle low (STCL) in early February would reconfirm the current bearish cycle translation and favor additional short-term weakness. Alternatively, a quick rebound followed by an extended alpha phase rally that moves above the beta high (BH) last week would signal the likely transition to a bullish translation.

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 sharply lower today, moving well below support at the lower boundary of the uptrend from February. Technical indicators are bearish overall, strongly favoring a return to previous lows of the downtrend from January.

Cycle Analysis

We are 8 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on February 8. Cycle translation is in question. 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 now through April 12, with our best estimate being in the March 23 to March 29 range.

  • Last STCL: February 8, 2018
  • Cycle Duration: 29 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through 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 toward the previous long-term high at 2,873.
  • Bearish Scenario: A close below current levels would predict a move down to congestion support at the 2,575 level.

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

Category: Forecasts, Short-term Forecasts


Comments are closed.