Short-term Forecast for March 21, 2007

| March 21, 2007

Synopsis:
The S&P 500 index closed sharply higher today, reconfirming the current uptrend.

Technical Analysis:
The S&P 500 index closed sharply higher today, reconfirming the uptrend from the beginning of the month. Technical indicators are now moderately bullish as money flow moves back above the 0 level, MACD momentum trends sharply higher in negative territory, MACD histograms trend up to a new high in positive territory and RSI trends higher in positive territory.

Outlook:
Any close above current levels would reconfirm the current uptrend from the beginning of the month and forecast additional gains, while a move below new support in the 1,410 area would forecast a return to the recent lows in the 1,374 area. The uptrend continuation scenario is more likely at the moment (70%/30%).

Treasuries

Synopsis:
The 30-year bond closed slightly higher today, holding below near-term resistance.

Technical Analysis:
The long bond closed slightly higher today, holding just below congestion resistance at 113. Technical indicators remain neutral to slightly bearish as MACD momentum drifts lower in positive territory, MACD histograms level off just below the 0 level and RSI holds just above the 50 level.

Outlook:
A close well above the recent high near 113.40 would reconfirm the current uptrend from January and forecast additional gains, while a close below uptrend channel support near 112.10 would suggest another test of strong congestion support at 110. Both scenarios remain equally likely (50%/50%).

Currencies

Synopsis:
The US dollar index closed moderately lower again today, reconfirming the current downtrend.

Technical Analysis:
The US dollar index closed moderately lower today, reconfirming the intermediate-term downtrend from the beginning of February. Technical indicators are moderately bearish as MACD momentum trends down to a new low in negative territory, MACD histograms trend lower in negative territory and RSI trends down toward oversold territory.

Outlook:
Any close below current levels would reconfirm the intermediate-term downtrend and forecast a test of the previous intermediate-term low near 82.5, while a move above resistance at the upper boundary of the downtrend channel near 83.85 would suggest the start of a new uptrend and forecast another test of the congestion resistance near 85.30. The downtrend continuation scenario is more likely (70%/30%).

Precious Metals

The Gold Currency Index (GCI) is a composite of gold prices in the currencies of 10 of the largest economies in the world as defined by GDP. It is therefore currency independent, reflecting the true, intrinsic value of gold as an international currency itself.

Synopsis:
The GCI closed moderately higher today, moving above last week’s high.

Technical Analysis:
The GCI closed moderately higher today, moving above recent highs after testing support at the lower boundary of the intermediate-term uptrend channel from last October. Technical indicators remain slightly bullish as MACD momentum turns higher just below the 0 level, MACD histograms move up into positive territory and RSI breaks above the 50 level.

Outlook:
A close above current levels would reconfirm the current uptrend and forecast another test of the intermediate-term highs near 17.70, while a close below intermediate-term uptrend channel support near 16.30 would suggest the potential start of a new intermediate-term downtrend. The uptrend continuation scenario remains slightly more likely (60%/40%).

Synopsis:
The Gold Miners index closed sharply higher today, reconfirming the current uptrend.

Technical Analysis:
The Gold Miners index closed sharply higher today, reconfirming the current uptrend from the low at the beginning of the month. Technical indicators are moderately bullish as MACD momentum trends higher in negative territory, MACD histograms break into positive territory and RSI trends to a new high in positive territory.

Outlook:
A close above current levels would reconfirm the uptrend from the beginning of the month and forecast additional gains, while a move back below 1,050 area would forecast a third test of the congestion support at the 1,000 level. The uptrend continuation scenario is more likely at the moment. (70%/30%).

Category: Forecasts, Short-term Forecasts


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