Short-term Forecast for May 23, 2019

| May 23, 2019

Stock Market Commentary

A cycle high signal was generated today, indicating that the alpha high (AH) of the current short-term cycle likely formed on May 21. We are 2 sessions into the alpha phase decline of the short-term cycle that began last week.

A quick rebound followed by an extended beta phase rally that moves up to new highs would reconfirm the current bullish trend and favor additional short-term strength. Alternatively, 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 sharply lower today, approaching recent short-term lows near congestion support in the 2,800 area. Technical indicators are moderately bearish overall, favoring a continuation of the decline from early May.

Cycle Analysis

A cycle high signal was generated today, indicating that the alpha high (AH) of the current cycle likely formed on May 21. We are 2 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on May 13. A quick rebound followed by an extended beta 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, 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: 8 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: June 24 to July 15; best estimate in the July 5 to July 11 range.
  • Setup Status: Cycle high setup occurred today.
  • Trigger Status: Cycle high trigger occurred today.
  • Signal Status: Cycle high signal was generated today.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A rebound and close above the previous short-term high at 2,952 would reconfirm the uptrend from December and forecast additional gains.
  • Bearish Scenario: A close well below congestion support in the 2,800 area would reconfirm the downtrend from early May and predict additional losses.

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

Category: Forecasts, Short-term Forecasts


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