Short-term Forecast for May 11, 2020

| May 11, 2020

Stock Market Commentary

We are 14 sessions into the beta phase rally of the short-term cycle that began on March 24. The beta high (BH) of the current cycle is imminent and it could form at any time.

An extended beta phase decline that moves below the last short-term cycle low (STCL) at 2,191 would reconfirm the current bearish trend and forecast additional losses. Alternatively, an extended beta phase rally that moves well above the last alpha high (AH) at 2,875 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 slightly higher today, holding near previous highs of the uptrend from March. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the advance.

Cycle Analysis

We are 14 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on March 23. The beta high (BH) is imminent and it could form at any time. A quick reversal followed by an extended beta phase decline that moves below the last STCL at 2,191 would reconfirm the current bearish translation and forecast additional losses. Alternatively, an extended beta phase rally that moves well above the last alpha high (AH) at 2,875 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is now through May 22, with our best estimate being in the May 14 to May 18 range.

  • Last STCL: March 23, 2020
  • Cycle Duration: 34 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through May 22; best estimate in the May 14 to May 18 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 current levels would reconfirm the uptrend from March and forecast a move up to congestion resistance in the 3,000 area.
  • Bearish Scenario: A reversal and close well below the middle of the Bollinger bands at 2,851 would predict a move down to the bottom of the Bollinger bands at 2,747.

Both scenarios are equally likely.

Category: Forecasts, Short-term Forecasts


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