Short-term Forecast for September 26, 2019

| September 26, 2019

Stock Market Commentary

The magnitude and duration of the current decline indicate that the latest short-term cycle likely began in late August. We are 10 sessions into the alpha phase decline of the current short-term cycle.

An extended alpha phase decline that moves below the last short-term cycle low (STCL) at 2,840 would reconfirm the current bearish trend and favor additional short-term weakness. Alternatively, a quick rebound followed by a move up to new highs would signal the likely transition to a bullish short-term 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 lower today, moving down toward recent short-term lows below previous highs of the uptrend from June. Technical indicators are slightly bullish overall, tentatively favoring a return to previous highs of the advance.

Cycle Analysis

The magnitude and duration of the current decline phase indicate that the latest short-term cycle likely began in late August. We are 10 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on August 23. An extended alpha phase decline that moves below the last STCL at 2,840 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, a quick rebound followed by a move up to new highs would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from October 4 to October 24, with our best estimate being in the October 16 to October 22 range.

  • Last STCL: August 23, 2019
  • Cycle Duration: 23 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: October 4 to October 24; best estimate in the October 16 to October 22 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 above the previous long-term high at 3,026 would reconfirm the uptrend from August and forecast additional gains.
  • Bearish Scenario: A close below the recent short-term low at 2,967 would predict a return to congestion support at the 2,940 level.

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

Category: Forecasts, Short-term Forecasts


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