Short-term Forecast for June 5, 2015

| June 5, 2015

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 slightly lower today, holding below previous long-term highs of the cyclical bull market from 2009. A bearish rising wedge formation has been developing since late 2014 and a close well below formation support near 2,100 would signal the likely start of a substantial correction. Technical indicators are neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.

Cycle Analysis

We are 10 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on April 1. A quick rebound followed by an extended alpha phase rally that moves well above the last beta high (BH) near 2,131 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, an extended beta phase decline that approaches the last STCL at 2,048 would suggest that cycle translation is in question. The window during which the next STCL is likely to occur is now through June 8.

  • Last STCL: April 1, 2015
  • Cycle Duration: 45 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: Now through June 8.
  • 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 the recent high at 2,131 would reconfirm the long-term uptrend and forecast additional gains.
  • Bearish Scenario: A close well below current levels would confirm a break below uptrend support and predict a move down toward the 200-day moving average at 2,045.

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 sharply higher today, moving up to a new high for the uptrend from April. Technical indicators are bullish overall, strongly favoring a continuation of the advance.

Cycle Analysis

We are 5 sessions into the rally phase of the cycle following the short-term cycle high (STCH) on May 12. An extended rally phase that moves well above the last STCH at 2.34% would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, a quick reversal followed by a move well below the last alpha low (AL) at 2.10% during the next decline phase would signal the likely transition to a bearish translation. The window during which the next STCH is likely to occur is now through June 23, with our best estimate being in the June 10 to June 16 range.

  • Last STCH: May 12, 2015
  • Cycle Duration: 18 sessions
  • Cycle Translation: Bullish
  • Next STCH Window: Now through June 23; best estimate in the June 10 to June 16 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 current levels would reconfirm the uptrend from April and forecast additional gains.
  • Bearish Scenario: A reversal and close below the middle of the Bollinger bands at 2.23% would predict a move down toward congestion support in the 2.05% area.

The bullish scenario is highly likely (>80% 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 sharply higher today, moving up toward recent short-term highs above previous lows of the downtrend from April. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Cycle Analysis

A cycle low signal was generated today, indicating that the beta low (BL) likely formed on June 4. We are 1 session into the beta phase rally of the cycle following the short-term cycle low (STCL) on May 15. The magnitude and duration of the last alpha phase rally suggests that cycle translation is in question. A quick reversal followed by an extended beta phase decline that moves below the last STCL at 93.18 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended beta phase rally that moves well above the last alpha high (AH) at 97.47 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from June 11 to June 25, with our best estimate being in the June 16 to June 22 range.

  • Last STCL: May 15, 2015
  • Cycle Duration: 14 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: June 11 to June 25; best estimate in the June 16 to June 22 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 above the recent short-term high at 97.53 would predict a move up toward congestion resistance in the 100 area.
  • Bearish Scenario: A reversal and close below congestion support at the 95 level would forecast a return to the previous short-term low at 93.18.

The bullish 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, moving down toward previous long-term lows of the cyclical downtrend. Technical indicators are bearish overall, strongly favoring a return to previous lows of the decline.

Cycle Analysis

We are 3 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on May 26. The beta low (BL) will likely form sometime during the next 2 sessions. The magnitude and duration of 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 June 11 to June 23, with our best estimate being in the June 12 to June 18 range.

  • Last STCL: May 26, 2015
  • Cycle Duration: 8 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: June 11 to June 23; best estimate in the June 12 to June 18 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 1,230 area would reconfirm the uptrend from March and forecast additional gains.
  • Bearish Scenario: A close below current levels would predict a move down toward the previous long-term low near 1,140.

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 near unchanged today, holding near the bottom of the recent trading range. The index has been confined to a trading range between 33.80 and 35 since February 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 are slightly bearish overall, tentatively favoring a move below the bottom of the trading range.

Short-term Outlook

  • Bullish Scenario: A rebound and close well above congestion resistance at the top of the current trading range at the 35 level would forecast a move up toward the previous short-term high at 36.39.
  • Bearish Scenario: A close well below congestion support at the bottom of the current trading range in the 33.80 area would predict a move down toward congestion support at the 32.80 level.

The bearish 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 moderately higher today, moving up toward previous highs of the uptrend from March. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Cycle Analysis

We are 3 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on May 19. A quick rebound followed by an extended alpha phase rally that moves well above the last beta high (BH) at 61.04 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, an extended beta phase decline that moves well below the last beta low (BL) at 56.51 would signal the likely transition to a bearish translation. The window during which the next STCL is likely to occur is now through June 22, with our best estimate being now through June 11. The latest STCL may have formed today, although we would need to see additional strength during the next session to confirm that development.

  • Last STCL: May 19, 2015
  • Cycle Duration: 12 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: Now through June 22; best estimate now through June 11.
  • 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 previous short-term high at 61.23 would reconfirm the uptrend from March and forecast additional gains.
  • Bearish Scenario: A close well below congestion support in the 55 area would predict a move down toward the previous low of the downtrend from 2014 at 42.43.

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

Category: Forecasts, Short-term Forecasts


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