Short-term Forecast for March 15, 2013

| March 15, 2013

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 slightly lower today, holding near recent highs of the cyclical bull market from 2009. Technical indicators are moderately bullish overall, favoring a continuation of the advance. However, the uptrend from November has moved higher at an unsustainable rate and it will almost certainly be followed by a violent overbought correction.

Cycle Analysis

We are 14 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on February 25. The alpha high (AH) will likely form sometime during the next 2 sessions. The magnitude and duration of the alpha phase rally reconfirms the current bullish translation and favors additional short-term strength. The window during which the next STCL is likely to occur is from April 8 to April 26, with our best estimate being in the April 18 to April 24 range.

  • Last STCL: February 25, 2013
  • Cycle Duration: 14 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: April 8 to April 26; 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 close above the recent high near 1,563 would reconfirm the long-term uptrend and forecast additional gains.
  • Bearish Scenario: A reversal and close well below short-term uptrend support near 1,520 would signal the likely development of an overbought correction.

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

Technical Analysis

Yields closed sharply lower today, retreating from recent highs of the uptrend from December. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Cycle Analysis

We are 10 sessions into the rally phase of the cycle following the short-term cycle high (STCH) on February 20. A cycle high signal was generated today, indicating that the latest STCH likely formed on March 11. Only a quick move above the stop level at 2.06% would invalidate the signal and suggest that the rally phase of the cycle from February is still in progress. Cycle translation remains in question. An extended decline phase of more than 11 sessions in duration that moves below the last alpha low (AL) near 1.84% would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, a brief, shallow decline phase of less than 9 sessions in duration followed by an extended rally phase that moves well above the developing STCH near 2.06% would signal the likely transition to a bullish translation. The window during which the next STCH is likely to occur is now through April 4, with our best estimate being now through March 21.

  • Last STCH: February 20, 2013
  • Cycle Duration: 17 sessions
  • Cycle Translation: Bearish
  • Next STCH Window: Now through April 4; best estimate now through March 21.
  • Setup Status: Cycle high setup occurred today.
  • Trigger Status: Cycle high trigger occurred today.
  • Signal Status: Cycle high signal was generated today.
  • Stop Level: 2.06%

Short-term Outlook

  • Bullish Scenario: A rebound and close well above the recent high near 2.06% would reconfirm the uptrend from December and forecast additional gains.
  • Bearish Scenario: A close below congestion support near 1.95% would predict a return to congestion support at the 1.84% level.

Both scenarios are equally likely.

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 lower today, retreating further from recent highs of the uptrend from February. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Cycle Analysis

We are 2 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on March 6. A cycle high signal was generated today, confirming that the alpha phase decline is in progress. A brief, shallow alpha phase decline of less than 5 sessions in duration followed by an extended beta phase rally that moves well above the last alpha high (AH) would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, an extended alpha phase decline of more than 6 sessions in duration that moves well below the last STCL would signal the likely transition to a bearish translation. The window during which the next STCL is likely to occur is from April 2 to April 16, with our best estimate being in the April 5 to April 11 range.

  • Last STCL: March 6, 2013
  • Cycle Duration: 8 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: April 2 to April 16; best estimate in the April 5 to April 11 range.
  • Setup Status: Cycle high setup occurred on March 14.
  • Trigger Status: Cycle high trigger occurred today.
  • Signal Status: Cycle high signal was generated today.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A rebound and close above the recent high at 82.92 would reconfirm the uptrend from February and forecast additional gains.
  • Bearish Scenario: A close below congestion support in the 81.50 area would predict a move down toward congestion support at the 80 level.

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 slightly higher again today, holding above recent lows of the downtrend from October and continuing a test of congestion resistance in the 1,600 area. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 5 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on March 8. Cycle translation remains in question. A quick reversal followed by an extended alpha phase decline of more than 3 sessions in duration that moves below the last STCL would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended alpha phase rally of more than 5 sessions in duration that moves well above the previous alpha high (AH) near 1,620 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from March 26 to April 8, with our best estimate being in the March 27 to April 3 range.

  • Last STCL: March 8, 2013
  • Cycle Duration: 5 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: March 26 to April 8; best estimate in the March 27 to April 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 the recent short-term high near 1,614 would predict a move up toward downtrend resistance near 1,643.
  • Bearish Scenario: A reversal and close below the recent short-term low near 1,564 would reconfirm the downtrend from October and forecast additional losses.

Both scenarios are equally likely.

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, holding below resistance at the upper boundary of the power downtrend from November. Technical indicators remain effectively neutral overall, suggesting that direction is in question.

Short-term Outlook

  • Bullish Scenario: A close above power downtrend resistance near 41.00 would predict a move up toward downtrend resistance near 42.85.
  • Bearish Scenario: A reversal and close below the recent low at 39.43 would reconfirm the downtrend from October and forecast additional losses.

Both scenarios are equally likely.

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 higher today, reacting further off of recent lows of the downtrend from January above the congestion zone in the 92.50 area. Technical indicators remain effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 9 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on March 4. The alpha high (AH) is imminent and it could form at any time. A quick reversal followed by an extended alpha phase decline of more than 4 sessions in duration that moves below the last STCL would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended alpha phase rally that moves well above the last beta high (BH) would suggest that cycle translation is in question. The window during which the next STCL is likely to occur is from March 21 to April 5, with our best estimate being in the March 26 to April 2 range.

  • Last STCL: March 4, 2013
  • Cycle Duration: 9 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: March 21 to April 5; best estimate in the March 26 to April 2 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 predict a move up toward congestion resistance in the 97 area.
  • Bearish Scenario: A reversal and close below the recent short-term low at 90.29 would reconfirm the downtrend from January and forecast a move down to congestion support at the 88 level.

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

Category: Forecasts, Short-term Forecasts


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