Short-term Forecast for February 7, 2019

| February 7, 2019

Stock Market Commentary

We are 7 sessions into the beta phase rally of the short-term cycle that began in December. A cycle high setup occurred today, suggesting that the beta high (BH) of the current cycle may have formed on February 5. A close below 2,702 on the S&P 500 index during the next session would generate a cycle high signal and indicate that the beta phase decline of the current cycle is likely in progress.

An extended beta phase decline that moves 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 alpha high (AH) in November 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 moderately lower today, retreating from recent highs of the uptrend from December. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

We are 7 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on December 24. A cycle high setup occurred today, suggesting that the beta high (BH) may have formed on February 5. A close below 2,702 during the next session would generate a cycle high signal and indicate that the beta phase decline is likely in progress. An extended beta phase decline that moves 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 alpha high (AH) in November at 2,814 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is now through February 27, with our best estimate being in the February 20 to February 26 range.

  • Last STCL: December 24, 2018
  • Cycle Duration: 30 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through February 27; best estimate in the February 20 to February 26 range.
  • Setup Status: Cycle high setup occurred today.
  • Trigger Status: Cycle high trigger is pending from today, requiring a close below 2,702 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 well above the 200-day moving average at 2,742 would reconfirm the uptrend from December and forecast a move up to congestion resistance in the 2,800 area.
  • Bearish Scenario: A close below congestion support in the 2,650 area would predict a return to congestion support at the 2,500 level.

Both scenarios are equally likely.

Category: Forecasts, Short-term Forecasts


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