Daily Chart: Technical and Cycle Analysis 31 October 2014
by Erik McCurdy, Prometheus Market Insight
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 and for long-term outlooks see the latest long-term forecast.
The index closed sharply higher today, moving up to a marginal new high for the cyclical bull market from 2009. Technical indicators are bullish overall, strongly favoring a continuation of the advance.
We are 12 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on October 15. The alpha high (AH) will likely form sometime during the next 3 sessions. The magnitude and duration of the alpha phase rally suggests that cycle translation is in question. A quick reversal followed by an extended alpha phase decline that moves below the last STCL near 1,820 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended alpha phase rally that moves well above the last beta high (BH) near 2,013 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from November 25 to December 16, with our best estimate being in the December 8 to December 12 range.
- Last STCL: October 15, 2014
- Cycle Duration: 12 sessions
- Cycle Translation: Bearish
- Next STCL Window: November 25 to December 16; best estimate in the December 8 to December 12 range.
- Setup Status: No active setups.
- Trigger Status: No pending triggers.
- Signal Status: No active signals.
- Stop Level: None active.
- Bullish Scenario: A close well above current levels would reconfirm the long-term uptrend and forecast additional gains.
- Bearish Scenario: A reversal and close below the 50-day moving average near 1,968 would predict a move down to the 200-day moving average near 1,912.
The bullish scenario is more likely (~70% probable).