Short-term Forecast for January 14, 2008

| January 14, 2008

Synopsis:
The S&P 500 index closed moderately higher today, consolidating recent losses.

Technical Analysis:
The S&P 500 index closed moderately lower today, consolidating recent losses of the powerful downtrend from the end of December. Technical indicators are moderately bearish as money flow holds near recent lows in negative territory, MACD momentum drifts lower near recent lows in negative territory, MACD histograms react off of recent lows in negative territory and RSI trends higher in negative territory.

Outlook:
A close below recent lows near 1,390 would reconfirm the current downtrend and forecast additional losses, while a move above nearby congestion resistance in the 1,420 area would suggest the start of a secondary reaction. The downtrend continuation scenario is slightly more likely at the moment (60% probable).

Treasuries

Synopsis:
The 30-year bond closed slightly higher today, continuing to consolidate recent gains.

Technical Analysis:
The long bond closed slightly higher today, consolidating recent gains of the uptrend from late December. Technical indicators are moderately bullish as MACD momentum drifts higher near recent highs in positive territory, MACD histograms hold near recent lows in positive territory and RSI moves sideways in positive territory.

Outlook:
A close well above the recent high near 118.80 would reconfirm the current uptrend and forecast additional gains, while a close below uptrend channel support near 118.40 would suggest the start of a secondary correction. The uptrend continuation scenario is slightly more likely (60% probable).

Currencies

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

Technical Analysis:
The US dollar index closed moderately lower today, reconfirming the intermediate-term downtrend from the middle of December. Technical indicators are moderately bearish as MACD momentum trends lower in negative territory, MACD histograms hold near recent highs in negative territory and RSI moves down to a new low in negative territory.

Outlook:
A move above downtrend channel resistance near 76.30 would suggest the start of a new intermediate-term uptrend and a test of recent highs near 77.75, while a close below congestion support near 75.50 would reconfirm the current downtrend and forecast a test of the long-term low near 75. The downtrend continuation scenario is slightly more likely (60% probable).

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 near unchanged today, consolidating recent gains.

Technical Analysis:
The GCI closed near unchanged as it continues to consolidate recent gains of the uptrend from mid December. Technical indicators are bullish as MACD momentum drifts up to new long-term highs in positive territory, MACD histograms retreat from recent highs in positive territory and RSI holds near recent highs in overbought territory.

Outlook:
A close above the recent high near 21.90 would reconfirm the current uptrend and forecast substantial additional gains, while a close below congestion support near 21 would suggest the start of a secondary correction. The uptrend continuation scenario remains more likely at the moment (70% probable).

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

Technical Analysis:
The Gold Miners index closed moderately higher today, reconfirming the uptrend from mid December. Technical indicators are bullish as MACD momentum moves to new highs in positive territory, MACD histograms holds at recent highs in positive territory and RSI trends up into overbought territory.

Outlook:
A close above current levels would reconfirm the current uptrend from December and forecast additional gains, while a close below new support at the 1,425 level would suggest the start of a secondary correction. The uptrend continuation scenario is more likely at the moment (70% probable).

Category: Forecasts, Short-term Forecasts


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