Stocks Potentially Enter Important Beta Phase
The S&P 500 index closed moderately higher today, continuing to hold below recent highs of the uptrend from early October near strong congestion resistance in the 1,260 area. Technical indicators are moderately bullish overall on the daily chart, favoring a return to recent highs. However, the extreme move from October is struggling to maintain its upward momentum and a break well below uptrend support near 1,243 would be a sign of developing short-term weakness.
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With respect to cycle analysis, the failure to continue down to new short-term lows during the last four sessions indicates that the Beta Low (BL) may have already formed on November 1. An alpha phase decline that lasts only two sessions is unusual, but not unexpected in this case given the extreme magnitude and duration of the preceding alpha phase rally. Additional strength or sideways consolidation during the next few sessions would confirm that the beta phase of the current cycle has begun.
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The stock market remains in a critical window with respect to long-term direction and it will be important to continue monitoring the development of this short-term cycle closely. We will identify the key developments as they occur in our market forecasts and signal notifications available to subscribers.
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Post Written By: prometheusmi
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