Short-term Forecast for September 23, 2013

| September 23, 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 long-term highs of the cyclical bull market from 2009. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the advance.

Cycle Analysis

A cycle high signal was generated today, confirming that the alpha high (AH) formed on September 19. We are 3 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on August 27. A brief, shallow alpha phase decline of less than 7 sessions in duration followed by an extended beta phase rally that moves well above the last AH near 1,730 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, 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: 18 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: October 8 to October 28; best estimate in the October 18 to October 24 range.
  • Setup Status: Cycle high setup occurred on September 20.
  • 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 well above the recent high near 1,727 would reconfirm the cyclical bull market from 2009 and forecast additional gains.
  • Bearish Scenario: A close below the 50-day moving average near 1,679 would predict a move down to uptrend support near 1,652.

Both scenarios are equally likely.

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 today, holding below recent highs of the uptrend from May and continuing a test of congestion support in the 2.71% area. Technical indicators are slightly bearish overall, tentatively favoring a continuation of the decline from early September.

Cycle Analysis

We are 9 sessions into the decline phase of the cycle following the short-term cycle high (STCH) on September 10. The magnitude of the decline phase indicates that cycle translation is in question. A quick rebound followed by an extended rally phase of more than 10 sessions in duration that moves well above the last STCH near 2.96% would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, an extended decline phase of more than 9 sessions in duration 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 October 1 to October 22, with our best estimate being in the October 7 to October 11 range.

  • Last STCH: September 10, 2013
  • Cycle Duration: 9 sessions
  • Cycle Translation: Bullish
  • Next STCH Window: October 1 to October 22; best estimate in the October 7 to October 11 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 2.98% would reconfirm the uptrend from May and forecast additional gains.
  • Bearish Scenario: A close well below congestion support in the 2.71% area would predict a return to congestion support at the 2.48% level.

The bearish 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 lows of the downtrend from July. Technical indicators are moderately bearish overall, favoring a continuation of the decline.

Cycle Analysis

We are 3 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on August 20. The move well below the last STCL during the alpha phase decline reconfirms the current bearish translation and favors additional short-term weakness. The window during which the next STCL is likely to occur is now through October 1, with our best estimate being in the September 25 to October 1 range.

  • Last STCL: August 20, 2013
  • Cycle Duration: 23 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through October 1; best estimate in the September 25 to October 1 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 in the 81.50 area would predict a return to the previous short-term high at 82.67.
  • Bearish Scenario: A close below the recent short-term low at 80.23 would reconfirm the downtrend from July and forecast additional losses.

The bearish scenario is more likely (~70% 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 near unchanged today, holding near recent short-term lows below previous highs of the uptrend from June. Technical indicators are slightly bearish overall, tentatively favoring a continuation of the decline from August.

Cycle Analysis

We are 2 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on September 18. The beta low (BL) will likely form sometime during the next 2 sessions, if it has not already occurred today. An extended alpha phase decline of more than 3 sessions in duration that moves below the last STCL near 1,292 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 4 sessions in duration that moves well above the last alpha high (AH) near 1,375 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from October 3 to October 15, with our best estimate being in the October 4 to October 10 range.

  • Last STCL: September 18, 2013
  • Cycle Duration: 4 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: October 3 to October 15; best estimate in the October 4 to October 10 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 the recent short-term low near 1,310 would predict a move down to congestion support in the 1,275 area.

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 near unchanged today, holding near recent short-term lows below previous highs 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 the middle of the Bollinger bands at 35.37 would predict a return to congestion resistance in the 37.50 area.
  • Bearish Scenario: A close below the recent short-term low at 33.78 would forecast 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 lower today, moving below support at the lower boundary of the uptrend from April. Technical indicators are moderately bearish overall, favoring a continuation of the decline from early September.

Cycle Analysis

We are 3 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on September 17. The beta low (BL) will likely form sometime during the next 2 sessions. The move below the last STCL during the alpha phase decline signals the likely transition to a bearish translation. The window during which the next STCL is likely to occur is from October 4 to October 18, with our best estimate being in the October 9 to October 15 range.

  • Last STCL: September 17, 2013
  • Cycle Duration: 4 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: October 4 to October 18; best estimate in the October 9 to October 15 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 high at 110.31 would reconfirm the uptrend from April and forecast additional gains.
  • Bearish Scenario: A close below current levels would confirm the break below uptrend support and predict a move down toward congestion support in the 98 area.

The bearish scenario is more likely (~70% probable).

Category: Forecasts, Short-term Forecasts


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