Short-term Forecast for April 16, 2018

| April 16, 2018

Stock Market Commentary

The stock market is 10 sessions into the alpha phase rally of the short-term cycle that began in early April.

The violent character of recent moves during the past two months suggests that short-term direction remains in question. A quick reversal followed by an extended alpha phase decline that moves below the short-term cycle low (STCL) in early February would reconfirm the current bearish trend and favor additional short-term weakness heading into the next low in late May. Alternatively, an extended alpha phase rally that moves above the beta high (BH) in early March would signal the likely transition to a bullish character.

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 moderately higher today, moving up to a new short-term high above previous lows of the downtrend from January. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 10 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on April 2. The alpha high (AH) will likely form sometime during the next 3 sessions. Cycle translation remains in question. A quick reversal followed by an extended alpha phase decline that moves below the STCL in February at 2,532 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, 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 May 11 to June 1, with our best estimate being in the May 23 to May 30 range.

  • Last STCL: April 2, 2018
  • Cycle Duration: 10 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: May 11 to June 1; best estimate in the May 23 to May 30 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 close well above the 50-day moving average at 2,687 would predict a move up toward congestion resistance in the 2,800 area.
  • Bearish Scenario: A reversal and close well below congestion support at the 2,575 level would reconfirm the downtrend from January and forecast additional losses.

Both scenarios are equally likely.

Category: Forecasts, Short-term Forecasts


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