Intermediate-term Forecast for February 1, 2020

| January 31, 2020

Stock Market Commentary

A cycle high signal was generated this week, indicating that an intermediate-term cycle high (ITCH) likely formed during the week ending January 17. We are 2 weeks into the decline phase of the intermediate-term cycle that began in October.

The magnitude and duration of the last rally phase reconfirm the current bullish trend and favor additional intermediate-term strength.

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 sharply lower this week, retreating further from recent highs of the uptrend from December. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the advance.

Cycle Analysis

A cycle high signal was generated this week, indicating that an intermediate-term cycle high (ITCH) likely formed during the week ending January 17. We are 2 weeks into the decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending October 11. The magnitude and duration of the last rally phase reconfirm the current bullish trend and favor additional intermediate-term strength. The window during which the next ITCL is likely to occur is now through March 27, with our best estimate being in the February 21 to March 27 range.

  • Last ITCL: October 11, 2019
  • Cycle Duration: 17 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: Now through March 27; best estimate in the February 21 to March 27 range.
  • Setup Status: Cycle high setup occurred this week.
  • Trigger Status: Cycle high trigger occurred this week.
  • Signal Status: Cycle high signal was generated this week.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A rebound and weekly close above the previous high at 3,330 would reconfirm the uptrend from December and forecast additional gains.
  • Bearish Scenario: A weekly close below current levels would predict a move down to the middle of the Bollinger bands at 3,127.

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

Category: Forecasts, Intermediate-term Forecasts


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