Short-Term Forecast for May 7, 2021

| May 7, 2021

Stock Market Commentary

A cycle low signal was generated today, indicating that the latest short-term low likely formed on May 5. We are 2 sessions into the alpha phase rally of the short-term cycle that began on May 5.

An extended alpha phase rally 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 low at 4,164 on the S&P 500 index would suggest that trend direction is in question.

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 2020. Technical indicators are bullish overall, strongly favoring a continuation of the advance.

Cycle Analysis

A cycle low signal was generated today, indicating that the latest short-term cycle low (STCL) likely formed on May 5. We are 2 sessions into the alpha phase rally of the of the cycle following the STCL on May 5. An extended alpha phase rally 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 4,164 would suggest that cycle translation is in question. The window during which the next STCL is likely to occur is from June 16 to July 7, with our best estimate being in the June 28 to July 2 range.

  • Last STCL: May 5, 2021
  • Cycle Duration: 2 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: June 16 to July 7; best estimate in the June 28 to July 2 range.
  • Setup Status: Cycle low setup occurred today.
  • Trigger Status: Cycle low trigger occurred today.
  • Signal Status: Cycle low signal was generated today.
  • 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 below the middle of the Bollinger bands at 4,172 would predict a return to the 50-day moving average at 4,034.

The bullish scenario is highly likely (>80% probable).

Category: Forecasts, Short-term Forecasts


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