by Erik McCurdy, Prometheus Market Insight

Technical Analysis

The index closed moderately lower yesterday (Tuesday 16 December 2014), retreating further from recent highs of the cyclical bull market from 2009 and moving below congestion support in the 1,980 area. Technical indicators are extremely bearish overall, strongly favoring a continuation of the decline from last week.

Cycle Analysis

We are 7 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on October 15. The quick move above the last alpha high (AH) during the beta phase rally signals the likely transition to a bullish translation and favors additional short-term strength. The window during which the next STCL is likely to occur is now through December 18.

Short-term Outlook

The bearish scenario is slightly more likely (~60% probable).