Intermediate-term Forecast for October 12, 2019

| October 11, 2019

Stock Market Commentary

We are 4 weeks into the second decline phase of the intermediate-term cycle that began in June.

A rebound and 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 higher this week, moving up toward previous highs of the uptrend from December. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

We are 4 weeks into the second decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending May 31. A quick rebound and 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 intermediate-term direction is in question. The window during which the next ITCL is likely to occur is now through November 29, with our best estimate being in the October 18 to November 15 range.

  • Last ITCL: May 31, 2019
  • Cycle Duration: 19 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: Now through November 29; best estimate in the October 18 to November 15 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 support at the lower boundary of the uptrend from December near 2,915 would predict a move down to the bottom of the Bollinger bands at 2,811.

Both scenarios are equally likely.

Category: Forecasts, Intermediate-term Forecasts


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