Intermediate-term Forecast for September 28, 2013

| September 28, 2013

S&P 500 Index Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the S&P 500 index. For short-term outlooks see the latest short-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

The index closed slightly lower this week, retreating from recent highs of the cyclical bull market from 2009. The uptrend from 2011 has moved higher at an unsustainable rate and it will likely be followed by a violent overbought correction. A slight negative divergence has developed between technical indicators and price behavior, resulting in an effectively neutral condition overall that suggests direction is in question.

Cycle Analysis

We are 4 weeks into the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending August 30. An extended rally off of the last ITCL that moves well above the half cycle high (HCH) in July near 1,710 would reconfirm the current bullish translation and favor additional intermediate-term strength. Alternatively, a quick reversal followed by an extended decline that moves well below the last ITCL near 1,633 would signal the likely transition to a bearish translation. The window during which the next ITCL is likely to occur is from December 20 to February 21, with our best estimate being in the January 17 to February 14 range.

  • Last ITCL: August 30, 2013
  • Cycle Duration: 4 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: December 20 to February 21; best estimate in the January 17 to February 14 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A weekly close well above the recent long-term high near 1,711 would reconfirm the cyclical bull market from 2009 and forecast additional gains.
  • Bearish Scenario: A reversal and close below nearby power uptrend support near 1,650 would predict a return to power uptrend support near 1,568.

Both scenarios are equally likely.

US 10-year Treasury Note Yield Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the US 10-year Treasury note yield. For short-term outlooks see the latest short-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

Yields closed moderately lower this week, retreating further from recent highs of the uptrend from 2012 near the congestion zone in the 2.80% area. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias. The advance from April has moved higher at an unsustainable rate and the recent break below uptrend support signals the likely start of a potentially violent overbought correction.

Cycle Analysis

We are 12 weeks into the cycle following the intermediate-term cycle high (ITCH) that occurred during the week ending July 5. A quick rebound followed by a move well above the last half cycle high (HCH) near 2.98% would reconfirm the current bullish translation and favor additional intermediate-term strength. Alternatively, an extended decline from the last HCH that returns to the last half cycle low (HCL) near 2.47% would suggest that cycle translation is in question. The window during which the next ITCH is likely to occur is from October 25 to January 17, with our best estimate being in the November 8 to December 6 range.

  • Last ITCH: July 5, 2013
  • Cycle Duration: 12 weeks
  • Cycle Translation: Bullish
  • Next ITCH Window: October 25 to January 17; best estimate in the November 8 to December 6 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A rebound and weekly close above the recent high near 2.94% would reconfirm the uptrend from 2012 and forecast additional gains.
  • Bearish Scenario: A close below current levels would predict a move down to the middle of the Bollinger bands near 2.53%.

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

US Dollar Index Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the US dollar index. For short-term outlooks see the latest short-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

The index closed slightly lower this week, continuing a test of congestion support in the 80 area. Technical indicators are moderately bearish overall, favoring a continuation of the decline from July.

Cycle Analysis

We are 15 weeks into the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending June 14. The move below the last ITCL during the decline from the second half cycle high (HCH) signals the likely transition to a bearish translation and favors additional intermediate-term weakness. The window during which the next ITCL is likely to occur is from October 4 to December 6, with our best estimate being in the October 4 to November 1 range.

  • Last ITCL: June 14, 2013
  • Cycle Duration: 15 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: October 4 to December 6; best estimate in the October 4 to November 1 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A rebound and weekly close well above the middle of the Bollinger bands at 82.23 would predict a move up toward the previous long-term high at 84.83.
  • Bearish Scenario: A close below congestion support in the 80 area would reconfirm the downtrend from July and forecast additional losses.

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

Gold Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the US dollar index. For short-term outlooks see the latest short-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

Gold closed slightly higher this week, holding near recent short-term lows above previous lows of the cyclical downtrend from 2011. Technical indicators are slightly bearish overall, tentatively favoring a return to previous lows of the decline.

Cycle Analysis

We are 12 weeks into the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending July 5. The return to the half cycle high (HCH) in June during the rally phase of the current cycle suggests that translation is in question. A move well below the last ITCL near 1,207 during the decline phase would reconfirm the current bearish translation and favor additional intermediate-term weakness. Alternatively, a shallow decline phase followed by an extended rebound off of the next ITCL that moves well above the last intermediate-term cycle high (ITCH) near 1,399 would signal the likely transition to a bullish translation. The window during which the next ITCL is likely to occur is from October 25 to December 13, with our best estimate being in the October 25 to November 22 range.

  • Last ITCL: July 5, 2013
  • Cycle Duration: 12 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: October 25 to December 13; best estimate in the October 25 to November 22 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A rebound and weekly close well above congestion resistance in the 1,400 area would reconfirm the oversold reaction from July and forecast additional gains.
  • Bearish Scenario: A close below the recent short-term low near 1,313 would predict a return to the previous low of the cyclical downtrend from 2011 near 1,213.

Both scenarios are equally likely.

Gold Currency Index Weekly 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 this week, holding above previous lows of the cyclical downtrend from 2011. Technical indicators are slightly bearish overall, tentatively favoring a return to previous lows of the decline.

Intermediate-term Outlook

  • Bullish Scenario: A rebound and weekly close well above the recent short-term high near 36.50 would confirm a break above downtrend resistance and predict a move up toward congestion resistance at the 40 level.
  • Bearish Scenario: A close below the recent short-term low at 33.81 would predict a return to the previous low of the cyclical downtrend from 2011 at 31.79.

Both scenarios are equally likely.

Oil Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the US dollar index. For short-term outlooks see the latest short-term forecast and for long-term outlooks see the latest long-term forecast.

Technical Analysis

Oil closed moderately lower this week, retreating further from previous highs of the cyclical uptrend from 2009. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 23 weeks into the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending April 19. The move well above the previous intermediate-term cycle high (ITCH) during the rally phase of the current cycle signals the likely transition to a bullish translation and favors additional intermediate-term strength. The window during which the next ITCL is likely to occur is now through December 20, with our best estimate being in the October 11 to November 8 range.

  • Last ITCL: April 19, 2013
  • Cycle Duration: 23 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: Now through December 20; best estimate in the October 11 to November 8 range.
  • Setup Status: No active setups.
  • Trigger Status: No pending triggers.
  • Signal Status: No active signals.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A rebound and weekly close above the recent high at 110.31 would reconfirm the uptrend from April and forecast a move up to congestion resistance in the 114 area.
  • Bearish Scenario: A close below congestion support in the 100 area would predict a return to congestion support at the 90 level.

Both scenarios are equally likely.

Category: Forecasts, Intermediate-term Forecasts


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