Short-term Forecast for November 18, 2020

| November 18, 2020

Stock Market Commentary

A cycle high signal was generated today, indicating that the alpha high (AH) of the current cycle likely formed on November 16. We are 2 sessions into the alpha phase decline of the short-term cycle that began on November 1.

An extended alpha phase decline that moves below the short-term low in September at 3,226 would reconfirm that current bearish short-term trend and forecast additional losses. Alternatively, a quick rebound followed by an extended beta phase rally that moves up to meaningful new highs 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 sharply lower today, retreating further from recent highs of the uptrend from March. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

A cycle high signal was generated today, indicating that the alpha high (AH) likely formed on November 16. We are 2 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on November 1. An extended alpha phase decline that moves below the STCL in September at 3,226 would reconfirm that current bearish translation and forecast additional losses. Alternatively, a quick rebound followed by an extended beta phase rally that moves up to meaningful new highs would signal the likely transition to a bullish short-term trend. The window during which the next STCL is likely to occur is from December 11 to December 31, with our best estimate being in the December 22 to December 29 range.

  • Last STCL: November 1, 2020
  • Cycle Duration: 12 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: December 11 to December 31; best estimate in the December 22 to December 29 range.
  • Setup Status: Cycle high setup occurred today.
  • Trigger Status: Cycle high trigger occurred today.
  • Signal Status: Cycle high signal was generated today.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A rebound and close well above the recent short-term high at 3,627 would reconfirm the uptrend from March and forecast additional gains.
  • Bearish Scenario: A close well below the middle of the Bollinger bands at 3,465 would predict a return to congestion support in the 3,200 area.

Both scenarios are equally likely.

Category: Forecasts, Short-term Forecasts


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