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Stock Market Short-term Cycle Likely Enters Beta Phase

|Includes: DIA, QQQ, SPDR S&P 500 Trust ETF (SPY)

The S&P 500 index closed sharply higher today, reacting off of recent lows of the violent downtrend from early May. As a result of today's rebound, both cycle analysis price oscillators experienced bullish crossovers and a bullish engulf pattern formed on the daily chart, generating a cycle low signal.

We have been expecting the formation of a short-term low and the cycle low signal indicates that the Beta Low (NASDAQ:BL) of the current cycle likely occurred yesterday. Only a move below the stop level at 1,271 tomorrow would invalidate the signal. The magnitude and duration of the decline from May calls long-term direction into question and the character of the forthcoming beta phase rally will provide the next short-term assessment of cyclical uptrend health.


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