Intermediate-term Forecast for October 3, 2020

| October 2, 2020

Stock Market Commentary

We are 5 weeks into the decline phase of the intermediate-term cycle that began in March. The latest intermediate-term low may have formed during the week ending September 25, although we would need to see additional strength to confirm that development.

The magnitude of the previous decline phase signals the likely transition to a bearish intermediate-term trend and favors additional losses.

S&P 500 Index Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the S&P 500 index. For short-term outlooks, see the latest short-term forecast.

Technical Analysis

The index closed moderately higher this week, moving up toward previous highs of the uptrend from March. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

We are 5 weeks into the decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending March 27. The magnitude of the last decline phase signals the likely transition to a bearish translation and favors additional weakness. The window during which the next ITCL is likely to occur is now through October 9. The latest ITCL may have formed during the week ending September 25, although we would need to see additional strength to confirm that development.

  • Last ITCL: March 27, 2019
  • Cycle Duration: 28 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: Now through October 9.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A rebound and weekly close above the recent long-term high at 3,510 would reconfirm the uptrend from March and forecast additional gains.
  • Bearish Scenario: A weekly close below the recent short-term low at 3,285 would predict a return to the middle of the Bollinger bands at 3,237.

Both scenarios are equally likely.

Category: Forecasts, Intermediate-term Forecasts


Comments are closed.