Short-term Forecast for March 18, 2020

| March 18, 2020

Stock Market Commentary

We are 10 sessions into the beta phase decline of the short-term cycle that began on February 3. A cycle low setup occurred today, suggesting that the latest short-term cycle low (STCL) may have formed today. A close above 2,529 on the S&P 500 index during the next session would generate a cycle low signal and indicate that the next short-term cycle is likely in progress.

The magnitude of the current beta phase decline reconfirms the current bearish short-term trend and favors additional short-term weakness.

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, returning to recent lows of the violent downtrend from February. Technical indicators are bearish overall, strongly favoring a continuation of the decline.

Cycle Analysis

We are 10 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on January 31. A cycle low setup occurred today, suggesting that the latest STCL may have formed today. A close above 2,529 on the S&P 500 index during the next session would generate a cycle low signal and indicate that the next cycle is likely in progress. The magnitude of the current beta phase decline reconfirms the bearish translation and favors additional short-term weakness. The window during which the next STCL is likely to occur is now through April 2, with our best estimate being now through March 19.

  • Last STCL: January 31, 2020
  • Cycle Duration: 32 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through April 2; best estimate now through March 19.
  • Setup Status: Cycle low setup occurred today.
  • Trigger Status: Cycle low trigger is pending from today, requiring a close above 2,529 during the next session to generate a cycle low signal.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A rebound and close above congestion resistance in the 2,750 area would predict a move up to the middle of the Bollinger bands at 2,910.
  • Bearish Scenario: A close below the recent short-term low at 2,386 would reconfirm the downtrend from February and forecast additional losses.

Both scenarios are equally likely.

Category: Forecasts, Short-term Forecasts


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