The S&P 500 index closed moderately lower today, retreating further from recent short-term highs of the volatile uptrend from early June and beginning a test of new congestion support in the 1,360 area. The brief, violent moves in both directions continue to reflect a highly speculative market that is in turmoil. It remains likely that the index will return to the low in early June following a confirmed breakdown of the uptrend.
With respect to cycle analysis, the sharp decline today generated a cycle high signal and caused a change to our preferred scenario. It is now likely that the beta phase of the short-term cycle from June is still in progress.
The stock market continues to exhibit behavior consistent with the formation of a cyclical top and the next important signal with respect to long-term direction will likely occur sometime during the next few weeks, so it will be important to continue monitoring price behavior closely.
We will identify the key developments as they occur in our daily market forecasts and signal notifications available to subscribers.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.