Short-term Forecast for December 31, 2020

| December 31, 2020

Stock Market Commentary

We are 12 sessions into the alpha phase rally of the short-term cycle that began on December 14. The alpha high (AH) of the current cycle will likely form sometime during the next 3 sessions.

The magnitude and duration of the last beta phase rally reconfirm the current bullish short-term trend and forecast additional gains.

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 to a new high for the uptrend from March. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

We are 12 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on December 14. The alpha high (AH) will likely form sometime during the next 3 sessions. The magnitude and duration of the last beta phase rally reconfirm the current bullish translation and favor additional short-term strength. The window during which the next STCL is likely to occur is from January 25 to February 12, with our best estimate being in the February 4 to February 10 range.

  • Last STCL: December 14, 2020
  • Cycle Duration: 12 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: January 25 to February 12; best estimate in the February 4 to February 10 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 above current levels would reconfirm the uptrend from March and forecast additional gains.
  • Bearish Scenario: A reversal and close well below the middle of the Bollinger bands at 3,698 would predict a return to the 50-day moving average at 3,585.

The bullish scenario is more likely (~70 probable).

Category: Forecasts, Short-term Forecasts


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