Intermediate-term Forecast for January 2, 2021

| January 2, 2021

Stock Market Commentary

We are 14 weeks into the rally phase of the intermediate-term cycle that began during the week ending September 25.

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

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

Cycle Analysis

We are 14 weeks into the rally phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending September 25. The magnitude and duration of the current rally phase reconfirm the current bullish translation and forecast additional gains. The window during which the next ITCL is likely to occur is from January 15 to March 19, with our best estimate being in the January 8 to February 5 range.

  • Last ITCL: September 25, 2020
  • Cycle Duration: 14 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: January 15 to March 19; best estimate in the January 8 to February 5 range.
  • 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 weekly close above current levels would reconfirm the uptrend from March and forecast additional gains.
  • Bearish Scenario: A reversal and weekly close well below the middle of the Bollinger bands at 3,508 would predict a return to the 50-week moving average at 3,218.

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

Category: Forecasts, Intermediate-term Forecasts


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