Short-term Forecast for April 1, 2011

| April 1, 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 reversed large early gains to close moderately higher today, approaching long-term highs of the cyclical bull market from 2009. Technical indicators remain moderately bullish overall, supporting a return to previous highs.

Cycle Analysis

We are 12 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 few sessions. The return to the beta high (BH) of the previous cycle during the alpha phase rally suggests that cycle translation is in question, and the character of the forthcoming alpha phase decline should provide additional clarity with respect to near-term direction. 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: 12 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 congestion resistance at current levels would predict a return to the previous long-term high near 1,343.
  • Bearish Scenario: A reversal and close well below new congestion support in the 1,300 area would forecast a return to the previous short-term low near 1,256.

The bullish scenario is more likely (~70% 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 reversed large early gains to close near unchanged today, holding below recent short-term highs and continuing a test of congestion resistance in the 3.50% area. Technical indicators remain effectively neutral overall, suggesting that near-term direction is in question.

Cycle Analysis

We are 21 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 sometime between now and April 7. Today’s early move well above the 3.50% level indicates that the latest STCH did not occur on March 29, although the weak close suggests that the high may be in the process of forming. Renewed weakness during the next few sessions would signal that the STCH occurred today.

  • Last STCH: March 4, 2011
  • Cycle Duration: 21 trading days
  • Cycle Translation: Left (bearish)
  • Next STCH Window: Now through April 14; best estimate now through April 7.
  • 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 congestion resistance in the 3.50% area would reconfirm the reaction from mid-March and forecast additional short-term gains.
  • Bearish Scenario: A close below congestion support at the 3.30% level would predict a return to the recent low near 3.21%.

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 reversed large early gains to close near unchanged today, continuing a test of resistance at the upper boundary of the downtrend from early January. Technical indicators remain slightly bearish overall, tentatively supporting a continuation of the decline.

Cycle Analysis

We are 19 trading days into the cycle following the short-term cycle low (STCL) on March 7. The window during which the next STCL is likely to occur is now through April 14, with our best estimate being somewhere in the April 4 to April 8 range. If the forthcoming STCL forms well above the preceding beta low (BL), a transition to right translation would become more likely.

  • Last STCL: March 7, 2011
  • Cycle Duration: 19 trading days
  • Cycle Translation: Left (bearish)
  • Next STCL Window: Now through April 14; best estimate in the April 4 to April 8 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 downtrend resistance at current levels would predict a return to congestion resistance at the 77 level.
  • Bearish Scenario: A close below the recent low near 75.40 would reconfirm the downtrend from early January and forecast additional losses.

Both scenarios are equally likely at the moment.

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 rebounded from large early losses to close slightly lower today, holding below recent all-time highs of the secular bull market. Technical indicators remain slightly bullish overall, tentatively supporting a continuation of the advance.

Cycle Analysis

We are 13 trading days into the cycle following the short-term cycle low (STCL) on March 15. Today’s early decline indicates that the beta high (BH) may have occurred yesterday, although we would need to see additional weakness or sideways consolidation during the next few sessions to confirm that development. Cycle translation is still assumed to be right, although the hesitation exhibited during the past several weeks suggests that near-term direction is in question, and a close well above the recent all-time high near $1,437 would be required to reconfirm the bullish bias. The window during which the next STCL is likely to occur is now through April 12, with our best estimate being somewhere in the April 5 to April 11 range.

  • Last STCL: March 15, 2011
  • Cycle Duration: 13 trading days
  • Cycle Translation: Right (bullish)
  • Next STCL Window: Now through April 12; 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 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 congestion support in the $1,420 area would predict a return to the recent short-term low at $1,395.

Both scenarios are equally likely at the moment.

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 slightly lower today, retreating from recent highs of the uptrend from late January. Technical indicators are 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.

Both scenarios are equally likely at the moment.

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 sharply higher again today, moving up to a new long-term high for the cyclical uptrend. Technical indicators remain moderately bullish overall, supporting a continuation of the advance.

Cycle Analysis

We are 12 trading days into the cycle following the short-term cycle low (STCL) on March 16. The beta high (BH) will likely form sometime during the next few sessions. 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: 12 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 above current levels would reconfirm the long-term uptrend and forecast additional gains.
  • Bearish Scenario: A quick reversal and close below congestion support in the $102.50 area would predict a return to previous short-term lows at the $96.50 level.

The bullish scenario is highly likely (>80% probable).

Category: Forecasts, Short-term Forecasts


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