Short-term Forecast for October 10, 2013

| October 10, 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 sharply higher today, reacting strongly off of recent short-term lows and moving above support at the 50-day moving average. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

A cycle low signal was generated today, indicating that the beta low (BL) likely formed on October 9. We are 1 session into the beta phase rally of the cycle following the short-term cycle low (STCL) on August 27. An extended beta phase rally of more than 7 sessions in duration that moves well above the last alpha high (AH) near 1,730 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, a brief, weak beta phase rally of less than 6 sessions in duration followed by an extended beta phase decline 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 now through October 30, with our best estimate being in the October 24 to October 30 range.

  • Last STCL: August 27, 2013
  • Cycle Duration: 31 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: Now through October 30; best estimate in the October 24 to October 30 range.
  • Setup Status: Cycle low setup occurred today.
  • Trigger Status: Cycle low trigger occurred today.
  • Signal Status: Cycle low signal was generated today.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close well above the previous long-term high near 1,727 would reconfirm the cyclical bull market from 2009 and forecast additional gains.
  • Bearish Scenario: A reversal and close below the recent short-term low near 1,655 would reconfirm the downtrend from September and predict a move down toward congestion support in the 1,600 area.

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 moderately higher today, reacting further off of recent short-term lows and beginning a test of congestion resistance in the 2.71% area. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 8 sessions into the rally phase of the cycle following the short-term cycle high (STCH) on September 10. A quick reversal followed by an extended decline phase that moves well below the last alpha low (AL) near 2.61% would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended rally phase of more than 9 sessions in duration that returns to the last STCH near 2.96% would suggest that cycle translation is in question. The window during which the next STCH is likely to occur is now through October 22, with our best estimate being now through October 14.

  • Last STCH: September 10, 2013
  • Cycle Duration: 22 sessions
  • Cycle Translation: Bearish
  • Next STCH Window: Now through October 22; best estimate now through October 14.
  • 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 congestion resistance in the 2.71% area would predict a move up toward the previous high of the uptrend from May near 2.98%.
  • Bearish Scenario: A reversal and close below the recent low near 2.61% would reconfirm the downtrend from early September and predict a return to congestion support at the 2.48% level.

Both scenarios are equally likely.

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 slightly higher today, reacting further off of recent lows of the downtrend from July. 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 rally of the cycle following the short-term cycle low (STCL) on September 18. A quick reversal followed by an extended beta phase decline of more than 6 sessions in duration that moves below the last beta low (BL) at 79.72 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 moves above the last alpha high (AH) near 80.75 would suggest that cycle translation is in question. The window during which the next STCL is likely to occur is from October 14 to October 28, with our best estimate being in the October 17 to October 23 range.

  • Last STCL: September 18, 2013
  • Cycle Duration: 16 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: October 14 to October 28; best estimate in the October 17 to October 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 close well above congestion resistance at the 81 level would predict a move up toward the previous short-term high at 82.67.
  • Bearish Scenario: A reversal and close below the recent low at 79.85 would reconfirm the downtrend from July and forecast additional losses.

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 moderately lower today, returning to recent short-term lows near congestion support at the 1,275 level. Technical indicators are bearish overall, strongly favoring a continuation of the decline from August.

Cycle Analysis

We are 3 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on October 2. The beta low (BL) is imminent and it could form at any time. An extended alpha phase decline that moves below the last STCL near 1,277 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 3 sessions in duration that returns to the last beta high (BH) near 1,354 would suggest that cycle translation is in question. The window during which the next STCL is likely to occur is from October 17 to October 29, with our best estimate being in the October 18 to October 24 range.

  • Last STCL: October 2, 2013
  • Cycle Duration: 7 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: October 17 to October 29; 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 rebound and close well above congestion resistance at the 1,350 level would predict a return to the short-term high in August near 1,418.
  • Bearish Scenario: A close below congestion support in the 1,275 area would predict a move down toward the previous low of the cyclical downtrend from 2011 near 1,200.

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 moderately lower today, returning to recent short-term lows near congestion support in the 33 area. Technical indicators are moderately bearish overall, favoring a continuation of the decline from August.

Short-term Outlook

  • Bullish Scenario: A rebound and close well above the 60-day moving average at 34.63 would predict a move up toward previous short-term highs of the uptrend from June near 37.
  • Bearish Scenario: A close below congestion support at the 33 level would forecast a move down to 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, reacting off of recent short-term lows below support at the lower boundary of the uptrend from April. Technical indicators are slightly bearish overall, tentatively favoring a continuation of the decline from early September.

Cycle Analysis

We are 2 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on October 1. A cycle low setup occurred today, suggesting that the beta low (BL) may have formed on October 9. A close above 103.49 during the next session would generate a cycle low signal and indicate that the beta phase rally is likely in progress. An extended alpha phase decline that moves below the last STCL at 101.06 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended beta phase rally of more than 4 sessions in duration that moves well above the recent short-term high at 103.80 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from October 18 to November 1, with our best estimate being in the October 21 to October 25 range.

  • Last STCL: October 1, 2013
  • Cycle Duration: 7 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: October 18 to November 1; best estimate in the October 21 to October 25 range.
  • Setup Status: Cycle low setup occurred today.
  • Trigger Status: Cycle low trigger is pending from today, requiring a close above 103.49 during the next session to generate a cycle low signal.
  • 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 103.99 would predict a move up toward the previous high of the uptrend from April at 110.31.
  • Bearish Scenario: A close below the recent short-term low at 101.46 would reconfirm the downtrend from early September and predict a move down to congestion support in the 98 area.

Both scenarios are equally likely.

Category: Forecasts, Short-term Forecasts


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