Short-term Forecast for March 5, 2019

| March 5, 2019

Stock Market Commentary

We are 24 sessions into the beta phase rally of the short-term cycle that began in December. The beta high (BH) of the current cycle is long overdue and it could form at any time, if it has not already occurred on March 4. A close below 2,784 on the S&P 500 index during the next session would generate a cycle high signal and indicate the beta phase decline of the current cycle is likely in progress.

Cycle direction is in question. A quick reversal followed by 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 slightly lower today, holding below recent highs of the uptrend from December and continuing a test of congestion resistance in the 2,800 area. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the advance.

Cycle Analysis

We are 24 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on December 24. The beta high (BH) is long overdue and it could form at any time, if it has not already occurred on March 4. A close below 2,784 during the next session would generate a cycle high signal and indicate the beta phase decline is likely in progress. Cycle translation is in question. A quick reversal followed by 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 March 15, with our best estimate being in the March 11 to March 15 range.

  • Last STCL: December 24, 2018
  • Cycle Duration: 47 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through March 15; best estimate in the March 11 to March 15 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 congestion resistance in the 2,800 area would reconfirm the uptrend from December and forecast additional gains.
  • Bearish Scenario: A close well below current levels would confirm a break below uptrend support and predict a return to congestion support in the 2,650 area.

Both scenarios are equally likely.

Category: Forecasts, Short-term Forecasts


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