Short-term Forecast for July 16, 2020

| July 16, 2020

Stock Market Commentary

We are 13 sessions into the alpha phase rally of the short-term cycle that began on June 27. The alpha high (AH) of the current cycle will likely form sometime during the next 3 sessions.

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 slightly lower today, holding near recent highs of the uptrend from March. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

We are 13 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on June 26. The alpha high (AH) will likely form sometime during the next 3 sessions. 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: 13 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: August 7 to August 27; best estimate in the August 19 to August 25 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 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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