Short-term Forecast for October 4, 2019

| October 4, 2019

Stock Market Commentary

A cycle low signal was generated today, indicating that a new short-term cycle has likely begun. We are 2 sessions into the alpha phase rally of the short-term cycle that began yesterday.

A quick reversal followed by an extended alpha phase decline that moves below the short-term low in August at 2,840 would reconfirm the current bearish trend and favor additional short-term weakness. Alternatively, an extended alpha phase rally that moves 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 sharply higher today, moving up toward previous highs of the uptrend from June. Technical indicators are neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.

Cycle Analysis

A cycle low signal was generated today, indicating that a short-term cycle low (STCL) likely formed on October 2. We are 2 sessions into the alpha phase rally of the cycle following the STCL on October 2. A quick reversal followed by an extended alpha phase decline that moves below the STCL in August at 2,840 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended alpha phase rally that moves 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 November 12 to December 3, with our best estimate being in the November 22 to November 29 range.

  • Last STCL: October 2, 2019
  • Cycle Duration: 2 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: November 12 to December 3; best estimate in the November 22 to November 29 range.
  • Setup Status: Cycle low setup occurred today.
  • Trigger Status: Cycle low trigger occurred today.
  • Signal Status: Cycle low signal was generated today.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close above the middle of the Bollinger bands at 2,977 would predict a return to the previous long-term high at 3,026.
  • Bearish Scenario: A reversal and close below the recent short-term low at 2,885 would predict a move down to congestion support at the 2,850 level.

Both scenarios are equally likely.

Category: Forecasts, Short-term Forecasts


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