Short-term Forecast for December 31, 2018

| December 31, 2018

Stock Market Commentary

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

The magnitude and duration of the last beta phase decline reconfirm the current bearish trend and favor additional weakness heading into the next short-term low in February.

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 October. 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 December 24. The magnitude and duration of the last 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 February 1 to February 22, with our best estimate being in the February 14 to February 20 range.

  • Last STCL: December 24, 2018
  • Cycle Duration: 4 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: February 1 to February 22; best estimate in the February 14 to February 20 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 middle of the Bollinger bands at 2,577 would predict a move up to congestion resistance in the 2,640 area.
  • Bearish Scenario: A reversal and close below the recent short-term low at 2,351 would reconfirm the downtrend from October and forecast additional losses.

The bearish scenario is slightly more likely (~60% probable).

Category: Forecasts, Short-term Forecasts


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