Short-term Forecast for October 17, 2018

| October 17, 2018

Stock Market Commentary

We are 4 sessions into alpha phase rally of the short-term cycle from early October.

The magnitude and duration of the last beta phase decline signal the likely transition to a bearish trend and favor additional short-term weakness in October and November.

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 near unchanged today, holding above previous short-term lows of the violent downtrend from early October and continuing a test of support at the 200-day moving average. Technical indicators are moderately bearish overall, favoring a return to previous lows of the decline.

Cycle Analysis

We are 4 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on October 11. The magnitude and duration of the last beta phase decline signal the likely transition to a bearish translation and favor additional short-term weakness. The window during which the next STCL is likely to occur is from November 21 to December 12, with our best estimate being in the December 4 to December 10 range.

  • Last STCL: October 11, 2018
  • Cycle Duration: 4 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: November 21 to December 12; best estimate in the December 4 to December 10 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 previous short-term high at 2,937 would reconfirm the uptrend from April and forecast additional gains.
  • Bearish Scenario: A close below the recent short-term low at 2,728 would predict a return to congestion support in the 2,700 area.

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

Category: Forecasts, Short-term Forecasts


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