Short-term Forecast for March 23, 2018

| March 23, 2018

Stock Market Commentary

The stock market is 9 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, approaching previous lows of the downtrend from January near congestion support in the 2,575 area. Technical indicators are extremely bearish overall, strongly favoring a continuation of the decline.

Cycle Analysis

We are 9 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 now through March 29.

  • Last STCL: February 8, 2018
  • Cycle Duration: 30 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through April 12; best estimate now through March 29.
  • 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 well below congestion support at the 2,575 level would reconfirm the downtrend from January and forecast additional losses.

The bearish scenario is more likely (~70% probable).

Category: Forecasts, Short-term Forecasts


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