Short-term Forecast for March 28, 2013

| March 28, 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 moderately higher today, moving up to a new high for the cyclical bull market from 2009. Technical indicators remain 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. A close well below short-term uptrend support currently near 1,540 would signal the likely development of the anticipated correction.

Cycle Analysis

We are 5 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on February 25. An extended beta phase rally of more than 8 sessions in duration that moves well above the last alpha high (AH) near 1,563 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, a quick reversal followed by an extended beta phase decline of more than 10 sessions in duration that returns to the last STCL near 1,488 would suggest that cycle translation is in question. 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 16 to April 22 range.

  • Last STCL: February 25, 2013
  • Cycle Duration: 23 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: April 8 to April 26; best estimate in the April 16 to April 22 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 reversal and close well below short-term uptrend support near 1,540 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 near unchanged today, continuing a test of congestion support in the 1.84% area. Yields have been confined to a trading range between 1.84% and 2.05% since January and a close well outside of this area will signal the likely direction of the next meaningful move with a high degree of statistical confidence. Technical indicators remain bearish overall, strongly favoring a move below the lower boundary of the trading range.

Cycle Analysis

We are 13 sessions into the decline phase of the cycle following the short-term cycle high (STCH) on March 11. The alpha low (AL) will likely form sometime during the next 3 sessions, if it has not already occurred today. Cycle translation remains in question. An extended decline phase that moves below the previous AL near 1.84% would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, a quick rebound followed by an extended rally phase of more than 11 sessions in duration that moves well above the last 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 from April 2 to April 23, with our best estimate being in the April 10 to April 16 range.

  • Last STCH: March 11, 2013
  • Cycle Duration: 13 sessions
  • Cycle Translation: Bearish
  • Next STCH Window: April 2 to April 23; best estimate in the April 10 to April 16 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 near 1.95% would predict a return to the upper boundary of the trading range in the 2.05% area.
  • Bearish Scenario: A close below the lower boundary of the trading range at the 1.84% level would reconfirm the decline from mid-March and forecast additional losses.

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 moderately lower today, retreating from recent highs of the uptrend from February. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

We are 4 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on March 25. An extended alpha phase rally of more than 7 sessions in duration that moves well above the last beta high (BH) at 83.24 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, a brief, weak alpha phase rally of less than 6 sessions in duration followed by an extended alpha phase decline that returns to the last STCL would suggest that cycle translation is in question. The window during which the next STCL is likely to occur is from April 18 to May 2, with our best estimate being in the April 23 to April 29 range.

  • Last STCL: March 25, 2013
  • Cycle Duration: 4 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: April 18 to May 2; best estimate in the April 23 to April 29 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 at 83.42 would reconfirm the uptrend from February and forecast additional gains.
  • Bearish Scenario: A reversal and close well below the middle of the Bollinger bands at 82.70 would predict a move down toward congestion support in the 81.50 area.

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 moderately lower today, continuing a test of congestion support in the 1,600 area above previous lows of the downtrend from October. Technical indicators are neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.

Cycle Analysis

We are 5 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on March 8. The move down to a new short-term low today indicates that the cycle from early March is likely still in progress. Cycle translation remains in question. A quick rebound followed by an extended alpha phase rally of more than 5 sessions in duration that moves well above the last beta high (BH) near 1,614 would signal the transition to a bullish translation and favor additional short-term strength. Alternatively, an extended beta phase decline that returns to the STCL in early March would favor a continuation of the current bearish translation. The window during which the next STCL is likely to occur is now through April 8, with our best estimate being now through April 2.

  • Last STCL: March 8, 2013
  • Cycle Duration: 14 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through April 8; best estimate now through April 2.
  • 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 1,614 would predict a move up toward downtrend resistance near 1,631.
  • Bearish Scenario: A close below the previous low of the downtrend from October near 1,564 would reconfirm the decline 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 moderately lower today, retreating from recent short-term highs of the oversold reaction from February. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Short-term Outlook

  • Bullish Scenario: A close well above the recent short-term high at 41.21 would reconfirm the reaction from February and predict a move up toward downtrend resistance near 42.70.
  • Bearish Scenario: A close below the recent low at 39.43 would reconfirm the downtrend from October and forecast additional losses.

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

Technical Analysis

Oil closed moderately higher today, returning to previous highs of the uptrend from November and beginning a test of congestion resistance in the 97 area. Technical indicators remain bullish overall, strongly favoring a continuation of the advance.

Cycle Analysis

We are 5 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on March 4. The beta high (BH) will likely form sometime during the next 2 sessions. The move well above the last alpha high (AH) during the beta phase rally signals the likely transition to a bullish translation and favors additional short-term strength. The window during which the next STCL is likely to occur is now through April 8, with our best estimate being in the April 2 to April 8 range.

  • Last STCL: March 4, 2013
  • Cycle Duration: 18 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: Now through April 8; best estimate in the April 2 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 above the previous high of the uptrend from November near 98 would reconfirm the advance and forecast additional gains.
  • Bearish Scenario: A reversal and close well below congestion support at the 92.50 level would predict a move down toward congestion support in the 88 area.

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

Category: Forecasts, Short-term Forecasts


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