Early last week, our cycle analysis identified the potential development of a short-term low in the stock market. On Wednesday, a cycle low signal was generated, confirming that the beta low (NASDAQ:BL) of the current short-term cycle formed on June 24.
The rebound off of the BL has struggled to advance during the last three sessions and the break below support at the lower boundary of the uptrend from November continues to signal caution from a short-term perspective.
The recent deterioration in stock market internals indicates that the long overdue cyclical top could form at any time. The current short-term cycle has reached a potential inflection point and price behavior during the next several sessions could have a significant impact on the long-term outlook, so it will be important to monitor the development of this cycle closely.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.