Intermediate-term Forecast for June 6, 2015

| June 6, 2015

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 moderately lower this week, retreating further from recent long-term highs of the cyclical bull market from 2009 and moving below support at the lower boundary of the power uptrend from 2014. The uptrend from 2011 has moved higher at an unsustainable rate and it will be followed by a violent overbought correction. A weekly close well below uptrend support near 1,975 would confirm a long-term breakdown and predict a move down toward congestion support in the 1,700 area. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Cycle Analysis

We are 2 weeks into the second decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending January 30. A quick rebound followed by an extended advance that moves well above the last half cycle high (HCH) at 2,126 would reconfirm the current bullish translation and favor additional intermediate-term strength. Alternatively, an extended decline phase that moves well below the last ITCL near 1,995 would signal the likely transition to a bearish translation. The window during which the next ITCL is likely to occur is now through July 24, with our best estimate being now through July 2.

  • Last ITCL: January 30, 2015
  • Cycle Duration: 18 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: Now through July 24; best estimate now through July 2.
  • 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 recent long-term high at 2,126 would reconfirm the cyclical bull market from 2009 and forecast additional gains.
  • Bearish Scenario: A close well below the middle of the Bollinger bands at 2,087 would predict a return to long-term uptrend support near 1,975.

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 sharply higher this week, moving up to a new high for the uptrend from February above resistance at the upper boundary of the downtrend from 2014. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

We are 7 weeks into the rally phase of the cycle following the intermediate-term cycle high (ITCH) that occurred during the week ending March 6. The move well above the stop level at 2.22% has invalidated the cycle high signal that was generated last week, suggesting that the cycle from March is still in progress. Additionally, the magnitude and duration of the current rally phase signals the likely transition to a bullish translation and favors additional intermediate-term strength. The window during which the next ITCH is likely to occur is now through June 26.

  • Last ITCH: March 6, 2015
  • Cycle Duration: 13 weeks
  • Cycle Translation: Bullish
  • Next ITCH Window: Now through June 26.
  • 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 above current levels would reconfirm the uptrend from February and forecast additional gains.
  • Bearish Scenario: A reversal and close below the middle of the Bollinger bands at 2.03% would predict a move down toward the previous low of the downtrend from 2014 at 1.67%.

The bullish 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, holding below previous long-term highs of the violent uptrend from 2014. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Cycle Analysis

We are 3 weeks into the rally phase of the cycle following theĀ intermediate-term cycle low (ITCL) that occurred during the week ending May 15. An extended rally phase that moves well above the half cycle high (HCH) in March at 100.65 would reconfirm the current bullish translation and favor additional intermediate-term strength. Alternatively, a quick reversal followed by a move well below the last ITCL at 93.18 during the next decline phase would signal the likely transition to a bearish translation. The window during which the next ITCL is likely to occur is from September 18 to November 13, with our best estimate being in the September 25 to October 23 range.

  • Last ITCL: May 15, 2015
  • Cycle Duration: 3 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: September 18 to November 13; best estimate in the September 25 to October 23 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 previous long-term high at 100.65 would reconfirm the uptrend from 2014 and forecast additional gains.
  • Bearish Scenario: A reversal and close below the recent short-term low at 93.18 would reconfirm the overbought correction from March and predict additional losses.

The bearish scenario is slightly more likely (~60% 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 moderately lower this week, moving down toward previous lows of the cyclical downtrend from 2011. Technical indicators are moderately bearish overall, favoring a return to previous lows of the decline.

Cycle Analysis

We are 3 weeks into the second decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending March 20. Cycle translation remains in question. A move well below the ITCL in October near 1,130 during the current decline phase would reconfirm the current bearish translation and favor additional intermediate-term weakness. Alternatively, a quick rebound followed by an extended rally phase that moves well above the lastĀ half cycle high (HCH) at 1,223 would signal the likely transition to a bullish translation. The window during which the next ITCL is likely to occur is now through August 21, with our best estimate being now through July 2.

  • Last ITCL: March 20, 2015
  • Cycle Duration: 12 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: Now through August 21; best estimate now through July 2.
  • 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 recent short-term high at 1,223 would predict a move up to congestion resistance at the 1,300 level.
  • Bearish Scenario: A close well below the previous long-term low at 1,158 would reconfirm the cyclical downtrend from 2011 and forecast additional losses.

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

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 sharply lower this week, approaching recent short-term lows below previous highs of the uptrend from 2014. Technical indicators are neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.

Intermediate-term Outlook

  • Bullish Scenario: A rebound and weekly close well above the previous high at 36.34 would reconfirm the uptrend from 2014 and forecast additional gains.
  • Bearish Scenario: A close below the recent short-term low at 33.68 would predict a move down toward the previous low of the cyclical downtrend from 2011 at 31.39.

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

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 slightly lower this week, holding near recent short-term highs above previous lows of the downtrend from 2014. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 19 weeks into the rally phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending January 30. The lack of upward progress during the last 3 weeks suggests that the intermediate-term cycle high (ITCH) may have formed during the week ending May 22, although we would need to see additional weakness next week to confirm that development. The move well below the previous ITCL during the last decline phase 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 now through September 25, with our best estimate being in the July 2 to July 31 range.

  • Last ITCL: January 30, 2015
  • Cycle Duration: 19 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: Now through September 25; best estimate in the July 2 to July 31 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 short-term high at 60.62 would reconfirm the oversold reaction from March and predict a move up to congestion resistance at the 66 level.
  • Bearish Scenario: A reversal and close well below congestion support in the 52.50 area would forecast a return to the previous low of the long-term downtrend from 2014 at 44.81.

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

Category: Forecasts, Intermediate-term Forecasts


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