Intermediate-term Forecast for August 17, 2019

| August 16, 2019

Stock Market Commentary

We are 3 weeks into the decline phase of the intermediate-term cycle that began in June.

A quick rebound followed by a move up to new highs would reconfirm the current bullish trend and favor additional intermediate-term strength. Alternatively, an extended decline phase that returns to the last intermediate-term cycle low (ITCL) at 2,729 on the S&P 500 index would suggest that intermediate-term direction is in question.

S&P 500 Index Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the S&P 500 index. For short-term outlooks, see the latest short-term forecast.

Technical Analysis

The index closed moderately lower this week, retreating further from previous highs of the uptrend from December. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 3 weeks into the decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending May 31. A quick rebound followed by a move up to new highs would reconfirm the current bullish translation and favor additional intermediate-term strength. Alternatively, an extended decline phase that returns to the last ITCL at 2,729 would suggest that cycle translation is in question. The window during which the next ITCL is likely to occur is from September 27 to November 29, with our best estimate being in the October 25 to November 22 range.

  • Last ITCL: May 31, 2019
  • Cycle Duration: 11 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: September 27 to November 29; best estimate in the October 25 to November 22 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A rebound and weekly close above the previous high at 3,026 would reconfirm the uptrend from December and forecast additional gains.
  • Bearish Scenario: A weekly close well below uptrend support near 2,920 would predict a move down to the bottom of the Bollinger bands at 2,791.

The bearish scenario is slightly more likely (~60 probable).

Category: Forecasts, Intermediate-term Forecasts


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