Short-term Forecast for February 21, 2020

| February 22, 2020

Stock Market Commentary

A cycle high signal was generated today, indicating that the alpha phase decline of the current short-term cycle is likely in progress. We are 2 sessions into the alpha phase decline of the short-term cycle that began on February 3.

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

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 lower today, retreating further from recent highs of the uptrend from October. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

A cycle high signal was generated today, indicating that the alpha phase decline of the current cycle is likely in progress. We are 2 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on January 31. The magnitude and duration of the last alpha phase rally reconfirm the current bullish translation and favor additional short-term strength. The window during which the next STCL is likely to occur is from March 13 to April 2, with our best estimate being in the March 25 to March 31 range.

  • Last STCL: January 31, 2020
  • Cycle Duration: 14 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: March 13 to April 2; best estimate in the March 25 to March 31 range.
  • Setup Status: Cycle high setup occurred today.
  • Trigger Status: Cycle high trigger occurred today.
  • Signal Status: Cycle high signal was generated today.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A rebound and close above the recent short-term high at 3,386 would reconfirm the uptrend from October and forecast additional gains.
  • Bearish Scenario: A close well below the 50-day moving average at 3,274 would predict a move down toward congestion support in the 3,150 area.

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

Category: Forecasts, Short-term Forecasts


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