Short-term Forecast for October 3, 2019

| October 3, 2019

Stock Market Commentary

We are 15 sessions into the beta phase decline of the short-term cycle that began in early August. The latest short-term cycle low (STCL) could form at any time, if it has not already occurred today.

An extended beta phase decline that moves below the last 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 higher today, reacting off of recent short-term lows below previous highs of the uptrend from June. Technical indicators are moderately bearish overall, favoring a continuation of the decline from September.

Cycle Analysis

We are 15 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on August 5. An extended beta 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 now through October 7. The latest STCL may have formed today, although we would need to see additional strength to confirm that development.

  • Last STCL: August 5, 2019
  • Cycle Duration: 42 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through October 7.
  • 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 middle of the Bollinger bands at 2,978 would predict a return to the previous long-term high at 3,026.
  • Bearish Scenario: A close below the recent short-term low at 2,885 would predict a move down to congestion support at the 2,850 level.

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

Category: Forecasts, Short-term Forecasts


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