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Stocks Struggle At Recent Bull Market High

ByErik McCurdy
Published 10/24/2012, 01:18 AM
Updated 07/09/2023, 06:31 AM

The S&P 500 index closed sharply lower yesterday, retreating further from recent highs of the cyclical bull market from 2009 and approaching congestion support in the 1,400 area. The volatile uptrend from June has failed to break above the 1,460 level three times during the last six weeks, indicating that the rally is losing strength.

SPX 1
With respect to cycle analysis, the sharp decline yesterday reconfirms that the alpha phase decline is in progress as indicated by the cycle high signal that was generated last week. Additionally, the quick move below the last short-term cycle low (STCL) following the early formation of the alpha high (AH) after only 4 sessions signals the likely transition to a bearish translation.
SPX 2
Although the short-term cycle has developed a bearish character, the intermediate-term cycle from June continues to exhibit an extremely bullish translation and the next important test of the cyclical bull market will occur after the next intermediate-term cycle low (ITCL) is in place.

SPX 3
The character of the rebound off of the forthcoming ITCL will provide the next signal with respect to long-term direction, so it will be important to monitor market behavior closely during the next several weeks.

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