Short-term Forecast for March 24, 2011

| March 24, 2011

S&P 500 Index Daily Chart Analyses

The following technical and cycle analyses provide short-term forecasts for the S&P 500 index. For intermediate-term outlooks see the latest weekly review, and for long-term outlooks see the latest big picture update.

Technical Analysis

The S&P 500 index closed moderately higher again today, moving well above congestion resistance in the 1,300 area and beginning a test of resistance at the upper boundary of the downtrend from February. Technical indicators are now slightly bullish overall, tentatively supporting a continuation of the reaction from last week.

Cycle Analysis

We are 6 trading days into the cycle following the short-term cycle low (STCL) on March 16. The alpha high (AH) of the current cycle will likely occur sometime during the next 2 weeks. If the AH forms during the next few sessions, left translation would be reconfirmed and additional short-term weakness would be forecast. Alternatively, a late developing AH would favor a return to recent long-term highs and suggest that cycle translation is in question. The window during which the next STCL is likely to occur is from April 27 to May 17, with our best estimate being somewhere in the May 9 to May 13 range.

  • Last STCL: March 16, 2011
  • Cycle Duration: 6 trading days
  • Cycle Translation: Left (bearish)
  • Next STCL Window: April 27 to May 17; best estimate in the May 9 to May 13 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close above downtrend resistance at current levels would reconfirm the short-term reaction from last week and predict a move up to congestion resistance in the 1,330 area.
  • Bearish Scenario: A quick reversal and close below the consolidation low at 1,292 would forecast a return to the recent short-term low near 1,256.

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

US 10-year Treasury Note Yield Daily Chart Analyses

The following technical and cycle analyses provide short-term forecasts for the 10-year Treasury note yield. For intermediate-term outlooks see the latest weekly review, and for long-term outlooks see the latest big picture update.

Technical Analysis

Yields closed moderately higher today, moving well above congestion resistance in the 3.32% area and approaching resistance at the upper boundary of the downtrend from early February. Technical indicators are now effectively neutral overall, suggesting that near-term direction is in question.

Cycle Analysis

We are 15 trading days into the cycle following the short-term cycle high (STCH) on March 4. The window during which the next STCH is likely to occur is now through April 14, with our best estimate being somewhere in the March 29 to April 4 range.

  • Last STCH: March 4, 2011
  • Cycle Duration: 15 trading days
  • Cycle Translation: Left (bearish)
  • Next STCH Window: Now through April 14; best estimate in the March 29 to April 4 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close above downtrend resistance near 3.44% would predict a move up to congestion resistance in the 3.50% area.
  • Bearish Scenario: A close below the recent low near 3.21% would reconfirm the downtrend from February and forecast additional losses.

Both scenarios are equally likely at the moment.

US Dollar Index Daily Chart Analyses

The following technical and cycle analyses provide short-term forecasts for the US dollar index. For intermediate-term outlooks see the latest weekly review, and for long-term outlooks see the latest big picture update.

Technical Analysis

The index closed near unchanged today, holding above recent lows of the downtrend from early January. Technical indicators are moderately bearish overall, supporting a continuation of the decline.

Cycle Analysis

We are 13 trading days into the cycle following the short-term cycle low (STCL) on March 7. Price action is struggling to rebound off of the beta low (BL), and a move down to new lows during the next few sessions would reconfirm left translation and forecast additional losses heading into the next STCL in early April. The window during which the next STCL is likely to occur is from March 31 to April 14, with our best estimate being somewhere in the April 5 to April 11 range.

  • Last STCL: March 7, 2011
  • Cycle Duration: 13 trading days
  • Cycle Translation: Left (bearish)
  • Next STCL Window: March 31 to April 14; best estimate in the April 5 to April 11 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close above downtrend resistance near 76.35 would predict a return to congestion resistance at the 77 level.
  • Bearish Scenario: A close well below the recent low near 75.40 would reconfirm the downtrend from early January and forecast additional losses.

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

Gold Daily Chart Analyses

The following technical and cycle analyses provide short-term forecasts for the gold market. For intermediate-term outlooks see the latest weekly review, and for long-term outlooks see the latest big picture update.

Technical Analysis

Gold reversed large early gains to close moderately lower today, retreating from recent all-time highs of the secular bull market. Technical indicators are slightly bullish overall, tentatively supporting a continuation of the advance.

Cycle Analysis

We are 7 trading days into the cycle following the short-term cycle low (STCL) on March 15. Today’s sharp intrasession reversal raises the possibility that the alpha high (AH) did not occur on March 21, and a continuation of today’s decline tomorrow would indicate that the AH actually formed today. The window during which the next STCL is likely to occur is from March 31 to April 12, with our best estimate being somewhere in the March 31 to April 6 range.

  • Last STCL: March 15, 2011
  • Cycle Duration: 7 trading days
  • Cycle Translation: Right (bullish)
  • Next STCL Window: March 31 to April 12; best estimate in the March 31 to April 6 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close well above the recent all-time high near $1,437 would confirm the long-term breakout and forecast substantial gains.
  • Bearish Scenario: A close below new congestion support in the $1,420 area would predict a return to the recent short-term low at $1,395.

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

Gold Currency Index Daily Chart Analysis

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 intrinsic value of gold as an international currency itself.

Technical Analysis

The GCI closed moderately lower today, retreating from recent highs of the uptrend from late January. Technical indicators are now neutral to slightly bullish overall, suggesting that near-term direction is in question with a slight upside bias.

Short-term Outlook

  • Bullish Scenario: A close above the recent high at 34.90 would reconfirm the uptrend from late January and predict a move up to the all-time high near 35.30.
  • Bearish Scenario: A close below the recent short-term low near 33.90 would confirm the break below congestion support at 34 and predict a move down toward congestion support in the 33 area.

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

Oil Daily Chart Analyses

The following technical and cycle analyses provide short-term forecasts for the oil market. For intermediate-term outlooks see the latest weekly review, and for long-term outlooks see the latest big picture update.

Technical Analysis

Oil closed slightly lower today, holding near recent long-term highs of the cyclical uptrend. Technical indicators remain moderately bullish overall, supporting a continuation of the advance.

Cycle Analysis

We are 6 trading days into the cycle following the short-term cycle low (STCL) on March 16. The alpha high (AH) will likely form sometime during the next 3 sessions, and it may have already occurred yesterday, although we would need to see weakness or sideways consolidation during the next few sessions to confirm that development. The window during which the next STCL is likely to occur is from April 4 to April 18, with our best estimate being somewhere in the April 7 to April 13 range.

  • Last STCL: March 16, 2011
  • Cycle Duration: 6 trading days
  • Cycle Translation: Right (bullish)
  • Next STCL Window: April 4 to April 18; best estimate in the April 7 to April 13 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close well above the recent high near $106 would reconfirm the long-term uptrend and forecast additional gains.
  • Bearish Scenario: A reversal and close below congestion support in the $96.50 area would predict a return to strong congestion support at the $92.50 level.

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

Category: Forecasts, Short-term Forecasts


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