Short-term Forecast for April 18, 2012

| April 18, 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 moderately lower today, holding above recent short-term lows of the overbought correction from early April. Technical indicators are neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.

Cycle Analysis

We are 30 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 of less than 9 sessions in duration followed by a move below the last STCL during the beta phase decline would confirm a transition to left translation. Alternatively, an extended beta phase rally that moves above the last alpha high (AH) near 1,419 would reconfirm right translation and favor additional short-term strength. The window during which the next STCL is likely to occur is now through May 7, with our best estimate being in the April 30 to May 4 range.

  • Last STCL: March 6, 2012
  • Cycle Duration: 30 trading days
  • Cycle Translation: Right (bullish)
  • Next STCL Window: Now through 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 reversal and close below congestion support in the 1,345 area would reconfirm the overbought correction from early April 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, moving down toward 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 10 trading days into the cycle following the short-term cycle high (STCH) on April 3. The cycle low signal that was generated yesterday remains in effect, indicating that the alpha low (AL) may have formed on April 16. Only a quick move below the stop level at 1.97% during the next session would suggest that the decline phase of the current cycle is still in progress. A weak rebound followed by a move below the last AL would reconfirm left translation and favor additional short-term weakness. Alternatively, an extended advance that returns to the last STCH would suggest that cycle translation is in question. The window during which the next STCH is likely to occur is from April 25 to May 16, with our best estimate being in the April 30 to May 4 range.

  • Last STCH: April 3, 2012
  • Cycle Duration: 10 trading days
  • Cycle Translation: Left (bearish)
  • Next STCH Window: April 25 to May 16; best estimate in the April 30 to May 4 range.
  • Setup Status: Cycle low setup occurred yesterday.
  • Trigger Status: Cycle low trigger occurred yesterday.
  • Signal Status: Cycle low signal was generated yesterday.
  • Stop Level: 1.97%

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 1.97% would forecast a move down to 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 slightly higher today, holding at congestion support in the 79.60 area. Technical indicators remain effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 11 trading days into the cycle following the short-term cycle low (STCL) on April 2. 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: 11 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 79.95 would forecast a return to the recent short-term high at 80.57.
  • Bearish Scenario: A close well below uptrend support near 79.10 would predict a return to previous lows of the downtrend from January near 78.30.

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

Technical Analysis

Gold closed moderately lower today, moving down toward recent short-term lows of the downtrend from late February. Technical indicators remain slightly bearish overall, tentatively favoring a continuation of the decline.

Cycle Analysis

We are 9 trading days into the cycle following the short-term cycle low (STCL) on April 4. The beta low (BL) is imminent and could form at any time. 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: 9 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 rebound and 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.

The bearish 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 slightly lower today, moving down toward recent short-term lows of the downtrend from late February. Technical indicators remain slightly bearish overall, tentatively favoring a continuation of the decline.

Short-term Outlook

  • Bullish Scenario: A rebound and close 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.

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

Technical Analysis

Oil closed moderately lower today, moving down toward support at the lower boundary of the uptrend from October 2011. Technical indicators are moderately bearish overall, favoring a continuation of the downtrend from February.

Cycle Analysis

We are 12 trading days into the cycle following the short-term cycle low (STCL) on March 30. A cycle high signal was nearly generated today, indicating that the beta high (BH) likely formed yesterday. A move below the beta low (BL) during the beta phase decline would reconfirm left translation and favor additional short-term weakness. Alternatively, a shallow decline followed by an extended alpha 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: 12 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 rebound and close above downtrend resistance near $106.40 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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