Short-term Forecast for April 13, 2012

| April 13, 2012

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 intermediate-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

The index closed sharply lower today, moving down toward recent short-term lows of the overbought correction from last week. Technical indicators are moderately bearish overall, favoring a continuation of the decline.

Cycle Analysis

We are 27 trading days into the cycle following the short-term cycle low (STCL) on March 6. The magnitude of the alpha phase decline indicates that cycle translation is in question. A weak beta phase rally followed by a move below the last STCL during the beta phase decline would confirm a transition to left translation. Alternatively, a move above the last alpha high (AH) near 1,419 during the beta phase rally would reconfirm right translation and favor additional short-term strength. The window during which the next STCL is likely to occur is from April 16 to May 7, with our best estimate being in the April 30 to May 4 range.

  • Last STCL: March 6, 2012
  • Cycle Duration: 27 trading days
  • Cycle Translation: Right (bullish)
  • Next STCL Window: April 16 to May 7; best estimate in the April 30 to May 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 well above the recent high near 1,419 would reconfirm the uptrend from October 2011 and forecast additional gains.
  • Bearish Scenario: A close below congestion support in the 1,345 area would reconfirm the developing overbought correction and predict a move down to congestion support at the 1,315 level.

The bearish 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 intermediate-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

Yields closed moderately lower today, approaching recent short-term lows of the violent decline from March. Technical indicators are bearish overall, strongly favoring a continuation of the decline.

Cycle Analysis

We are 18 trading days into the cycle following the short-term cycle high (STCH) on March 19. It remains possible that the alpha low (AL) formed on April 10, although we would need to see a quick return to recent short-term highs near 2.05% to confirm that development. A move above the last STCH during the rally phase of the current cycle would be required to reconfirm right translation and favor additional short-term strength. Alternatively, a weak rebound followed by a move below the developing AL would confirm a transition back to left translation. The window during which the next STCH is likely to occur is now through May 1, with our best estimate being in the April 18 to April 24 range.

  • Last STCH: March 19, 2012
  • Cycle Duration: 18 trading days
  • Cycle Translation: Right (bullish)
  • Next STCH Window: Now through May 1; best estimate in the April 18 to April 24 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 rebound and close above congestion resistance at the 2.10% level would predict a move up toward the recent short-term high near 2.28%.
  • Bearish Scenario: A close below the recent short-term low near 1.99% would forecast a move down toward congestion support in the 1.90% area.

The bearish scenario is more likely (~70% probable).

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 intermediate-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

The index closed sharply higher today, moving up toward resistance at the upper boundary of the downtrend from January. Technical indicators are slightly bullish overall, tentatively favoring a move above downtrend resistance.

Cycle Analysis

We are 8 trading days into the cycle following the short-term cycle low (STCL) on April 2. The strong rebound today indicates that the beta low (BL) likely formed yesterday. A weak beta phase rally followed by a quick return to the last STCL during the beta phase decline would suggest that cycle translation is in question. Alternatively, an extended beta phase rally that moves above the last beta high (BH) would reconfirm right translation and favor additional short-term strength. The window during which the next STCL is likely to occur is from April 27 to May 11, with our best estimate being in the April 27 to May 3 range.

  • Last STCL: April 2, 2012
  • Cycle Duration: 8 trading days
  • Cycle Translation: Right (bullish)
  • Next STCL Window: April 27 to May 11; best estimate in the April 27 to May 3 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 80 would forecast a return to the recent short-term high at 80.57.
  • Bearish Scenario: A reversal and close well below uptrend support near 79 would predict a return to previous lows of the downtrend from January near 78.30.

The bullish 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 intermediate-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

Gold closed sharply lower today, retreating from congestion resistance in the $1,680 area near resistance at the upper boundary of the downtrend from late February. Technical indicators are neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.

Cycle Analysis

We are 6 trading days into the cycle following the short-term cycle low (STCL) on April 4. The sharp decline today indicates that the alpha high (AH) likely formed yesterday. An extended alpha phase decline that moves below the last STCL would reconfirm left translation and favor additional short-term weakness. Alternatively, a shallow decline followed by an extended beta phase rally that moves well above the last beta high (BH) would signal a likely transition to right translation. The window during which the next STCL is likely to occur is from April 23 to May 3, with our best estimate being in the April 24 to April 30 range.

  • Last STCL: April 4, 2012
  • Cycle Duration: 6 trading days
  • Cycle Translation: Left (bearish)
  • Next STCL Window: April 23 to May 3; best estimate in the April 24 to April 30 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 short-term high near $1,690 would confirm the start of a new short-term uptrend and predict a move up toward congestion resistance in the $1,750 area.
  • Bearish Scenario: A close below the recent short-term low near $1,622 would reconfirm the downtrend from late February and predict a move down to congestion support at the $1,600 level.

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 moderately lower today, retreating from congestion resistance in the 41.60 area slightly above resistance at the upper boundary of the downtrend from late February. Technical indicators are neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.

Short-term Outlook

  • Bullish Scenario: A close well above congestion resistance in the 41.60 area would predict a move up to congestion resistance at the 42.50 level.
  • Bearish Scenario: A close below the recent short-term low near 40.50 would reconfirm the downtrend from late February and forecast a move down to congestion support in the 39.60 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 intermediate-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

Oil closed slightly lower today, holding above support at the lower boundary of the uptrend from October 2011. Technical indicators remain slightly bearish overall, tentatively favoring a continuation of the downtrend from late February.

Cycle Analysis

We are 9 trading days into the cycle following the short-term cycle low (STCL) on March 30. A weak beta phase rally followed by a move below the beta low (BL) would reconfirm left translation and favor additional short-term weakness. Alternatively, an extended beta phase rally that moves above the last alpha high (AH) would suggest that cycle translation is in question. The window during which the next STCL is likely to occur is from April 19 to May 3, with our best estimate being in the April 19 to April 25 range.

  • Last STCL: March 30, 2012
  • Cycle Duration: 9 trading days
  • Cycle Translation: Left (bearish)
  • Next STCL Window: April 19 to May 3; best estimate in the April 19 to April 25 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 $106.80 would predict a return to the recent high near $109.70.
  • Bearish Scenario: A close below the recent short-term low near $101 would confirm a break below uptrend support and forecast a move down toward congestion support at the $96 level.

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

Category: Forecasts, Short-term Forecasts


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