The S&P 500 index reversed early gains to close sharply lower today, approaching recent short-term lows below previous highs of the cyclical bull market from 2009. After failing to break above the 1,460 level three times in September and October, the volatile uptrend from June has struggled to rebound off of congestion support in the 1,400 area, indicating that the rally is losing strength.
With respect to cycle analysis, the sharp decline today indicates that the beta high (NYSE:BH) may have already formed today, although we would need to see a move down to new short-term lows to confirm that development.
Although the current short-term cycle has a bearish translation, the intermediate-term cycle from June continues to exhibit a bullish translation and the next important test of the cyclical bull market will occur after the next intermediate-term cycle low (ITCL) is in place.
The character of the rebound off of the forthcoming ITCL will provide the next signal with respect to long-term direction, so it will be important to monitor market behavior closely during the next several weeks.
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.