The S&P 500 index has struggled to advance during the rally phase of the current annual cycle from October and it remains possible that the Annual Cycle High (NYSE:ACH) has already formed in November.
The stock market continues to track the bearish long-term scenario that we outlined in June and a confirmed annual cycle translation change from bullish to bearish would provide the final confirmation that a cyclical bear market began in May.
From an intermediate-term perspective, the sharp decline this week indicates that the second Half Cycle High (NYSE:HCH) of the cycle from October may have formed last week.
The long-term and intermediate-term cycles are both on the verge of generating meaningful bearish signals and the subsequent development of the current short-term cycle will indicate if those signals are likely to occur sometime during the next several weeks. The S&P 500 index continues to track the two short-term scenarios that we outlined earlier this month and the character of the forthcoming beta phase will determine which scenario is in control.
Chart analysis is a useful tool that, when judiciously applied, facilitates the identification of the most likely scenarios and their associated probabilities. The markets do not always have an interesting story to tell, but when price behavior approaches a significant inflection point with potential ramifications across all time frames, it is important to pay attention. The stock market is on the verge of providing the final confirmation that a cyclical bear market began in May, so we will monitor the current short-term cycle closely. We will identify the key developments as they occur in our daily market forecasts and signal notifications available to subscribers.
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