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Stock Market Rally Reconfirms Bullish Translation

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

The S&P 500 index closed moderately higher today, moving up to marginal new highs for the uptrend from October 2011 and the cyclical bull market from early 2009. Technical indicators are moderately bullish overall on the daily chart, favoring additional short-term strength. However, the advance from October remains extremely overextended on an intermediate-term basis and it will almost certainly be followed by a violent overbought correction.

 

 

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With respect to cycle analysis, the move higher today reconfirms the bullish translation that has persisted since the rally began in October and favors additional short-term strength. Due to the choppy nature of price behavior during the last two weeks, there are currently two viable short-term cycle scenarios.

 

 

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The alpha phase rally terminated either on March 19 or on March 26.In either event, the beta phase rally is now in progress and cycle translation remains decidedly bullish. Additional price behavior will provide renewed clarity during the next two weeks, at which point our computer model will have a more accurate window for the development of the next Short-Term Cycle Low (STCL). 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.