Short-term Forecast for October 8, 2019

| October 8, 2019

Stock Market Commentary

We are 4 sessions into the alpha phase rally of the short-term cycle that began in early October.

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 lower today, moving down toward previous lows of the downtrend from September. Technical indicators are bearish overall, strongly favoring a return to previous lows of the decline.

Cycle Analysis

We are 4 sessions into the alpha phase rally of the cycle following the short-term cycle low (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: 4 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: November 12 to December 3; best estimate in the November 22 to November 29 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 middle of the Bollinger bands at 2,970 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 more likely (~70 probable).

Category: Forecasts, Short-term Forecasts


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