Short-term Forecast for July 2, 2020

| July 2, 2020

Stock Market Commentary

A cycle low signal was generated today, indicating that a short-term low likely formed on June 26. We are 4 sessions into the alpha phase rally of the short-term cycle that began on June 27.

An extended alpha phase rally that moves up to new highs would reconfirm the current bullish short-term trend and forecast additional gains. Alternatively, a quick reversal followed by an extended alpha phase decline that moves well below the last short-term cycle low (STCL) at 3,009 would signal the likely transition to a bearish 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, moving up toward previous highs of the uptrend from March. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Cycle Analysis

A cycle low signal was generated today, indicating that the latest short-term cycle low (STCL) likely formed on June 26. We are 4 sessions into the alpha phase rally of the cycle following the STCL on May 14. An extended alpha phase rally that moves up to new highs would reconfirm the current bullish translation and forecast additional gains. Alternatively, a quick reversal followed by an extended alpha phase decline that moves well below the last STCL at 3,009 would signal the likely transition to a bearish translation. The window during which the next STCL is likely to occur is from August 7 to August 27, with our best estimate being in the August 19 to August 25 range.

  • Last STCL: June 26, 2020
  • Cycle Duration: 4 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: August 7 to August 27; best estimate in the August 19 to August 25 range.
  • Setup Status: Cycle low setup occurred today.
  • Trigger Status: Cycle low trigger occurred today.
  • Signal Status: Cycle low signal was generated today.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close above the previous short-term high at 3,232 would reconfirm the uptrend from March and forecast additional gains.
  • Bearish Scenario: A reversal and close well below congestion support in the 3,000 area would confirm the start of a new downtrend and predict additional losses.

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

Category: Forecasts, Short-term Forecasts


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