Short-term Forecast for May 21, 2019

| May 21, 2019

Stock Market Commentary

We are 6 sessions into the alpha phase rally of the short-term cycle that began last week.

An extended alpha phase rally that moves up to new highs would reconfirm the current bullish trend and favor additional short-term strength. Alternatively, a quick reversal followed by an extended alpha phase decline that moves well below the last short-term cycle low (STCL) would signal the likely transition to a bearish 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 higher today, moving up toward previous highs of the uptrend from December. Technical indicators are neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.

Cycle Analysis

We are 6 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on May 13. An extended alpha phase rally that moves above the last beta high (BH) at 2,952 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, a quick reversal followed by an extended alpha phase decline that moves well below the last STCL at 2,811 would signal the likely transition to a bearish translation. The window during which the next STCL is likely to occur is from June 24 to July 15, with our best estimate being in the July 5 to July 11 range.

  • Last STCL: May 13, 2019
  • Cycle Duration: 6 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: June 24 to July 15; best estimate in the July 5 to July 11 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 above the previous short-term high at 2,952 would reconfirm the uptrend from December and forecast additional gains.
  • Bearish Scenario: A reversal and close well below congestion support in the 2,800 area would reconfirm the downtrend from early May and predict additional losses.

Both scenarios are equally likely.

Category: Forecasts, Short-term Forecasts


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