Short-term Forecast for December 4, 2018

| December 4, 2018

Stock Market Commentary

A cycle high signal was generated today, indicating that the beta high (BH) of the short-term cycle from October likely formed on December 3. We are 1 session into the beta phase decline of the current cycle.

The magnitude and duration of the beta phase decline in October reconfirm the current bearish trend and favor additional weakness heading into the next short-term low in two to three weeks.

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 down toward previous lows of the violent downtrend from early October. Technical indicators are slightly bearish overall, tentatively favoring a return to previous lows of the decline.

Cycle Analysis

A cycle high signal was generated today, indicating that the beta high (BH) of the current cycle likely formed on December 3. We are 1 session into the beta phase decline of the cycle following the short-term cycle low (STCL) on October 29. The magnitude and duration of the previous beta phase decline reconfirm the current bearish translation and favor additional short-term weakness. The window during which the next STCL is likely to occur is from December 10 to December 31, with our best estimate being in the December 14 to December 20 range.

  • Last STCL: October 29, 2018
  • Cycle Duration: 25 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: December 10 to December 31; best estimate in the December 14 to December 20 range.
  • Setup Status: Cycle high setup occurred today.
  • Trigger Status: Cycle high trigger occurred today.
  • Signal Status: Cycle high signal was generated today.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A rebound and close above congestion resistance in the 2,800 area would predict a move up to the top of the Bollinger bands at 2,827.
  • Bearish Scenario: A close below congestion support in the 2,700 area would forecast a return to the previous short-term low at 2,632.

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

Category: Forecasts, Short-term Forecasts


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