Short-term Forecast for September 4, 2018

| September 4, 2018

Stock Market Commentary

We are 13 sessions into the alpha phase rally of the short-term cycle from August. A cycle high setup occurred on August 31, suggesting that the alpha high (AH) of the current cycle may have formed on August 29. A close below current levels on the S&P 500 index during the next session would generate a cycle high signal and indicate that the alpha phase decline of the current cycle is likely in progress.

The magnitude and duration of the current alpha phase rally reconfirm the current bullish trend and favor additional short-term strength.

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, holding near recent highs of the uptrend from April. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

We are 13 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on August 15. A cycle high setup occurred on August 31, suggesting that the alpha high (AH) may have formed on August 29. A close below current levels during the next session would generate a cycle high signal and indicate that the alpha phase decline is likely in progress. The magnitude and duration of the current alpha phase rally reconfirm the current bullish translation and favor additional short-term strength. The window during which the next STCL is likely to occur is from September 26 to October 16, with our best estimate being in the October 8 to October 12 range.

  • Last STCL: August 15, 2018
  • Cycle Duration: 13 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: September 26 to October 16; best estimate in the October 8 to October 12 range.
  • Setup Status: Cycle high setup occurred on August 31.
  • Trigger Status: Cycle high trigger is pending from August 31, requiring a close below current levels during the next session to generate a cycle high signal.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close above the recent short-term high at 2,914 would reconfirm the uptrend from April and forecast additional gains.
  • Bearish Scenario: A reversal and close well below the middle of the Bollinger bands at 2,865 would predict a return to congestion support in the 2,800 area.

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

Category: Forecasts, Short-term Forecasts


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