Short-term Forecast for October 25, 2019

| October 25, 2019

Stock Market Commentary

We are 17 sessions into the alpha phase rally of the short-term cycle that began in early October. The alpha high (AH) of the current cycle is overdue and it could form at any time.

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 moderately higher today, returning to recent long-term highs. Technical indicators are moderately bullish overall, tentatively favoring a continuation of the advance.

Cycle Analysis

We are 17 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on October 2. The alpha high (AH) is overdue and it could form at any time. 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: 17 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 close well above congestion resistance in the 3,020 area would reconfirm the uptrend from August and forecast additional gains.
  • Bearish Scenario: A reversal and close below the lower boundary of uptrend support near 2,908 would predict a move down to congestion support at the 2,850 level.

The bullish scenario is more likely (~70 probable).

Category: Forecasts, Short-term Forecasts


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