Short-term Forecast for August 14, 2013

| August 14, 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 lower today, retreating further from recent highs of the cyclical bull market from 2009. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 8 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on June 24. A quick rebound followed by an extended alpha phase rally of more than 10 sessions in duration that moves well above the last beta high (BH) near 1,710 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, an extended beta phase decline of more than 10 sessions in duration that approaches the last STCL near 1,560 would suggest that cycle translation is in question. The window during which the next STCL is likely to occur is now through August 26, with our best estimate being in the August 19 to August 23 range.

  • Last STCL: June 24, 2013
  • Cycle Duration: 36 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: Now through August 26; best estimate in the August 19 to August 23 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 the recent long-term high near 1,710 would reconfirm the cyclical bull market from 2009 and forecast additional gains.
  • Bearish Scenario: A close well below current levels would confirm a break below nearby power uptrend support and predict a return to the 50-day moving average near 1,656.

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 near unchanged today, holding near previous highs of the uptrend from May at the upper boundary of the recent trading range. Yields have been confined to a trading range between 2.48% and 2.73% since late June and a close well outside of this area will predict the direction of the next meaningful move with a high degree of statistical confidence. Technical indicators remain slightly bullish overall, tentatively favoring a continuation of the uptrend.

Cycle Analysis

We are 3 sessions into the rally phase of the cycle following the short-term cycle high (STCH) on August 2. Cycle translation remains in question. An extended rally phase of more than 9 sessions in duration that moves well above the last STCH near 2.74% would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, a brief, weak rally phase of less than 8 sessions in duration followed by an extended decline phase that moves below the last alpha low (AL) near 2.55% would signal the likely transition to a bearish translation. The window during which the next STCH is likely to occur is from August 22 to September 13, with our best estimate being in the August 26 to August 30 range.

  • Last STCH: August 2, 2013
  • Cycle Duration: 9 sessions
  • Cycle Translation: Bullish
  • Next STCH Window: August 22 to September 13; best estimate in the August 26 to August 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 upper boundary of the recent trading range at the 2.73% level would reconfirm the uptrend from May and forecast additional gains.
  • Bearish Scenario: A reversal and close below the lower boundary of the trading range at the 2.48% level would confirm a break below uptrend support and predict additional losses.

The bullish scenario is slightly more likely (~60% 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 near unchanged today, holding above recent short-term lows near the congestion zone in the 81.50 area. Technical indicators remain slightly bearish overall, tentatively favoring a continuation of the decline from July.

Cycle Analysis

We are 4 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on July 29. A brief, weak beta phase rally of less than 6 sessions in duration followed by a move below the last beta low (BL) at 80.89 during the beta phase decline would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended beta phase rally of more than 7 sessions in duration that approaches the last alpha high (AH) at 82.61 would suggest that cycle translation is in question. The window during which the next STCL is likely to occur is from August 22 to September 6, with our best estimate being in the August 22 to August 28 range.

  • Last STCL: July 29, 2013
  • Cycle Duration: 12 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: August 22 to September 6; best estimate in the August 22 to August 28 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 middle of the Bollinger bands at 81.91 would predict a return to congestion resistance in the 83 area.
  • Bearish Scenario: A reversal and close below the recent short-term low at 81.08 would forecast a move down to congestion support at the 80 level.

Both scenarios are equally likely.

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 higher today, moving up toward previous highs of the oversold reaction from June below congestion resistance in the 1,350 area. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the advance.

Cycle Analysis

The lack of upward progress during the last 2 sessions indicates that the alpha high (AH) likely formed on August 12. We are 2 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on August 7. The beta low (BL) may have formed today, although we would need to see additional strength during the next session to confirm that development. Cycle translation remains in question. A quick rebound followed by an extended beta phase rally of more than 4 sessions in duration that moves well above the AH in July near 1,349 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, an extended alpha phase decline of more than 3 sessions in duration that moves well below the last STCL near 1,272 would signal the likely transition to a bearish translation. The window during which the next STCL is likely to occur is from August 22 to September 4, with our best estimate being in the August 22 to August 28 range.

  • Last STCL: August 7, 2013
  • Cycle Duration: 6 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: August 22 to September 4; best estimate in the August 22 to August 28 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 the 1,350 level would reconfirm the uptrend from June and forecast additional gains.
  • Bearish Scenario: A reversal and close below congestion support in the 1,250 area would predict a return to the previous low of the downtrend from October near 1,200.

The bullish 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 higher today, holding below previous highs of the oversold reaction from June. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the advance.

Short-term Outlook

  • Bullish Scenario: A close above congestion resistance at the 35 level would reconfirm the oversold reaction from June and forecast additional gains.
  • Bearish Scenario: A reversal and close below the recent short-term low at 33.13 would predict a move down toward the previous low of the downtrend from October at 31.15.

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 slightly higher today, moving up toward recent highs of the violent uptrend from April. Technical indicators remain slightly bullish overall, tentatively favoring a continuation of the advance.

Cycle Analysis

We are 4 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on July 30. The beta high (BH) will likely form sometime during the next 3 sessions. The return to the last STCL during the alpha phase decline suggests that cycle translation is in question. An extended beta phase rally of more than 4 sessions in duration that moves well above the previous BH at 108.93 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, a quick reversal followed by an extended beta phase decline that moves well below the last STCL at 102.67 would signal the likely transition to a bearish translation. The window during which the next STCL is likely to occur is from August 16 to August 30, with our best estimate being in the August 20 to August 26 range.

  • Last STCL: July 30, 2013
  • Cycle Duration: 11 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: August 16 to August 30; best estimate in the August 20 to August 26 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 at 108.16 would reconfirm the uptrend from April and forecast additional gains.
  • Bearish Scenario: A close below the recent short-term low at 103.15 would predict a move down to uptrend support near 100.10.

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

Category: Forecasts, Short-term Forecasts


Comments are closed.