Short-term Forecast for August 12, 2019

| August 12, 2019

Stock Market Commentary

We are 5 sessions into the beta phase rally of the short-term cycle that began in July. The beta high (BH) of the current cycle may have formed on August 8, although we would need to see additional weakness to confirm that development.

The magnitude and duration of the last alpha phase decline signals the likely transition to a bearish trend and favors additional short-term weakness during the next decline phase.

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, moving down toward previous lows of the violent downtrend from July. Technical indicators are extremely bearish overall, strongly favoring a return to previous lows of the decline.

Cycle Analysis

We are 5 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on July 19. The beta high (BH) may have formed on August 8, although we would need to see additional weakness to confirm that development. The magnitude and duration of the last alpha phase decline signals the likely transition to a bearish translation and favors additional short-term weakness. The window during which the next STCL is likely to occur is from August 27 to September 19, with our best estimate being in the August 27 to September 3 range.

  • Last STCL: July 19, 2019
  • Cycle Duration: 16 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: August 27 to September 19; best estimate in the August 27 to September 3 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 rebound and close well above the 50-day moving average at 2,939 would predict a move up to the middle of the Bollinger bands at 2,962.
  • Bearish Scenario: A close below the recent short-term low at 2,845 would predict a move down to the 200-day moving average at 2,794.

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

Category: Forecasts, Short-term Forecasts


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