Short-term Forecast for January 30, 2019

| January 30, 2019

Stock Market Commentary

A cycle low signal was generated today, indicating that the beta low (BL) of the short-term cycle that began in December likely formed on January 29. We are 1 session into the beta phase rally of the current short-term cycle.

A quick reversal followed by a move below the last short-term cycle low (STCL) at 2,351 would reconfirm the current bearish trend and forecast additional short-term weakness. Alternatively, an extended beta phase rally that moves well above the last alpha high (AH) at 2,814 would signal the likely transition to a bullish trend.

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 higher today, moving up to a new high for the uptrend from December above congestion resistance in the 2,650 area. Technical indicators are bullish overall, strongly favoring a continuation of the advance.

Cycle Analysis

A cycle low signal was generated today, indicating that the beta low (BL) of the current short-term cycle likely formed on January 29. We are 1 session into the beta phase rally of the cycle following the short-term cycle low (STCL) on December 24. A quick reversal followed by a move below the last STCL at 2,351 would reconfirm the current bearish translation and favor additional weakness. Alternatively, an extended beta phase rally that moves well above the last alpha high (AH) at 2,814 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from February 3 to February 27, with our best estimate being in the February 20 to February 26 range.

  • Last STCL: December 24, 2018
  • Cycle Duration: 24 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: February 3 to February 27; best estimate in the February 20 to February 26 range.
  • Setup Status: Cycle low setup occurred today.
  • Trigger Status: Cycle low trigger occurred today.
  • Signal Status: Cycle low signal was generated today.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close above current levels would reconfirm the uptrend from December and forecast additional gains.
  • Bearish Scenario: A reversal and close below congestion support at the 2,500 level would predict a move down toward the previous short-term low at 2,351.

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

Category: Forecasts, Short-term Forecasts


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