Short-term Forecast for September 12, 2013

| September 12, 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 from recent short-term highs below previous long-term highs of the cyclical bull market from 2009. Technical indicators are slightly bullish overall, tentatively favoring a return to previous highs of the bull market.

Cycle Analysis

We are 11 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on August 27. An extended alpha phase rally 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, a quick reversal followed by an extended alpha phase decline of more than 8 sessions in duration that returns to the last STCL near 1,630 would suggest that cycle translation is in question. The window during which the next STCL is likely to occur is from October 8 to October 28, with our best estimate being in the October 18 to October 24 range.

  • Last STCL: August 27, 2013
  • Cycle Duration: 11 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: October 8 to October 28; best estimate in the October 18 to October 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 short-term high near 1,689 would forecast a move up to the previous long-term high of the cyclical bull market near 1,710.
  • Bearish Scenario: A reversal and close below the recent short-term low near 1,630 would predict a move down to uptrend support near 1,614.

The bullish 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 slightly lower again today, holding above support at the lower boundary of the uptrend from May. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the advance.

Cycle Analysis

We are 8 sessions into the rally phase of the cycle following the short-term cycle high (STCH) on August 22. An extended rally phase of more than 9 sessions in duration that moves well above the last STCH near 2.92% would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, a quick reversal followed by an extended decline phase that moves well below the last alpha low (AL) near 2.75% would signal the likely transition to a bearish translation. The window during which the next STCH is likely to occur is from September 13 to October 4, with our best estimate being in the September 16 to September 20 range. The latest STCH may have formed on September 10, although we would need to see additional weakness during the next session to confirm that development.

  • Last STCH: August 22, 2013
  • Cycle Duration: 14 sessions
  • Cycle Translation: Bullish
  • Next STCH Window: September 13 to October 4; best estimate in the September 16 to September 20 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 2.98% would reconfirm the uptrend from May and forecast additional gains.
  • Bearish Scenario: A close well below congestion support in the 2.73% area would confirm a break below uptrend support and predict a return to congestion support at the 2.48% level.

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, continuing a test of support at the lower boundary of the uptrend from February. Technical indicators remain neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.

Cycle Analysis

We are 5 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on August 20. The magnitude and duration of the alpha phase rally suggests that cycle translation is in question. An extended alpha phase decline of more than 6 sessions in duration that moves below the last STCL at 80.77 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, a quick rebound followed by an extended beta phase rally of more than 7 sessions in duration that moves well above the last alpha high (AH) at 82.67 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from September 16 to September 30, with our best estimate being in the September 20 to September 26 range.

  • Last STCL: August 20, 2013
  • Cycle Duration: 16 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: September 16 to September 30; best estimate in the September 20 to September 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 rebound and close above the recent short-term high at 82.67 would predict a return to congestion resistance in the 83 area.
  • Bearish Scenario: A close well below congestion support at the 81.50 level would confirm a break below uptrend support and forecast a move down to congestion support at the 80 level.

The bearish 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, breaking well below support at the lower boundary of the uptrend from June. Technical indicators are moderately bearish overall, favoring a continuation of the decline from late August.

Cycle Analysis

The sharp decline today has caused a change to our preferred scenario and it is now likely that the latest short-term cycle low (STCL) formed on September 6. We are 4 sessions into the alpha phase decline of the cycle following the STCL on September 6. The beta low (BL) is imminent and it could form at any time. The move well below the last STCL during the alpha phase decline signals the likely transition to a bearish translation and favors additional short-term weakness. The window during which the next STCL is likely to occur is from September 23 to October 3, with our best estimate being in the September 24 to September 30 range.

  • Last STCL: September 6, 2013
  • Cycle Duration: 5 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: September 23 to October 3; best estimate in the September 24 to September 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 above the recent short-term high near 1,418 would reconfirm the uptrend from June and forecast a move up to congestion resistance in the 1,475 area.
  • Bearish Scenario: A close below current levels would predict a move down to congestion support in the 1,275 area.

The bearish scenario is more likely (~70% 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 sharply lower today, breaking below support at the lower boundary of the uptrend from June. Technical indicators are moderately bearish overall, favoring a continuation of the decline from August.

Short-term Outlook

  • Bullish Scenario: A rebound and close above congestion resistance in the 37.50 area would reconfirm the uptrend from June and forecast additional gains.
  • Bearish Scenario: A close below current levels would predict a move down toward the previous low of the downtrend from October at 31.15.

The bearish scenario is more likely (~70% 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, moving up toward recent highs of the uptrend from April near the congestion zone at the 108 level. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the advance.

Cycle Analysis

We are 4 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on August 21. A cycle low signal was nearly generated today, suggesting that the latest STCL may have formed on September 10. Additional strength tomorrow would generate a cycle low signal and indicate that the next cycle is likely 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) at 110.31 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, an extended beta phase decline of more than 5 sessions in duration that moves well below the last STCL at 103.50 would signal the likely transition to a bearish translation. The window during which the next STCL is likely to occur is now through September 24, with our best estimate being now through September 17.

  • Last STCL: August 21, 2013
  • Cycle Duration: 15 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: Now through September 24; best estimate now through September 17.
  • 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 at 110.31 would reconfirm the uptrend from April and forecast additional gains.
  • Bearish Scenario: A reversal and close below the middle of the Bollinger bands at 107.48 would predict a move down to uptrend support near 103.60.

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

Category: Forecasts, Short-term Forecasts


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