Short-term Forecast for February 29, 2016

| February 29, 2016

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 from recent short-term highs above previous lows of the downtrend from November. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 11 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on January 20. The beta high (BH) is imminent and it could form at any time, if it has not already occurred on February 26. The magnitude and duration of the last beta 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 from March 2 to March 22, with our best estimate being in the March 8 to March 14 range.

  • Last STCL: January 20, 2016
  • Cycle Duration: 27 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: March 2 to March 22; best estimate in the March 8 to March 14 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 the 50-day moving average at 1,942 would predict a move up toward congestion resistance in the 2,000 area.
  • Bearish Scenario: A reversal and close below the previous short-term low at 1,829 would reconfirm the downtrend from November and forecast additional losses.

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 lower today, holding near resistance at the upper boundary of the downtrend from November. Technical indicators are slightly bearish overall, tentatively favoring a return to previous lows of the decline.

Cycle Analysis

We are 8 sessions into the decline phase of the cycle following the short-term cycle high (STCH) on February 17. A cycle low signal was generated on February 26, indicating that the alpha low (AL) likely formed on February 24. Only a quick move below the stop level at 1.70% would invalidate the signal and indicate that the decline phase is still in progress. A quick reversal followed by an extended decline phase that moves below the AL in mid-February at 1.57% would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended rally phase that moves well above the last STCH at 1.85% would signal the likely transition to a bullish translation. The window during which the next STCH is likely to occur is from March 9 to March 30, with our best estimate being in the March 11 to March 17 range.

  • Last STCH: February 17, 2016
  • Cycle Duration: 8 sessions
  • Cycle Translation: Bearish
  • Next STCH Window: March 9 to March 30; best estimate in the March 11 to March 17 range.
  • Setup Status: Cycle low setup occurred on February 26.
  • Trigger Status: Cycle low trigger occurred on February 26.
  • Signal Status: Cycle low signal was generated on February 26.
  • Stop Level: 1.70%

Short-term Outlook

  • Bullish Scenario: A close well above the middle of the Bollinger bands at 1.78% would predict a move up toward congestion resistance in the 2.15% area.
  • Bearish Scenario: A reversal and close below the previous short-term low at 1.57% would reconfirm the downtrend from November and forecast additional losses.

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 at recent short-term highs above previous lows of the downtrend from December. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 11 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on February 11. The alpha high (AH) is imminent and it could form at any time. The magnitude and duration of the last beta 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 March 9 to March 23, with our best estimate being in the March 14 to March 18 range.

  • Last STCL: February 11, 2016
  • Cycle Duration: 11 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: March 9 to March 23; best estimate in the March 14 to March 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 close well above congestion resistance in the 98 area would predict a move up toward the previous short-term high at 100.25.
  • Bearish Scenario: A reversal and close below the previous short-term low at 95.62 would reconfirm the downtrend from December and forecast additional losses.

Both scenarios are equally likely.

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 higher today, moving up toward previous highs of the uptrend from December. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

We are 2 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on February 16. The beta low (BL) of the current cycle may have formed on February 26, although we would need to see additional strength during the next session to confirm that development. The magnitude and duration of the last beta phase rally reconfirms the current bullish translation and favors additional short-term strength. The window during which the next STCL is likely to occur is from March 3 to March 15, with our best estimate being in the March 7 to March 11 range.

  • Last STCL: February 16, 2016
  • Cycle Duration: 9 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: March 3 to March 15; best estimate in the March 7 to March 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 close above the previous short-term high at 1,247 would reconfirm the uptrend from December and forecast additional gains.
  • Bearish Scenario: A close well below congestion support in the 1,185 area would predict a return to congestion support at the 1,150 level.

The bullish 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, returning to recent short-term highs above previous lows of the long-term downtrend. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the rebound from mid-February.

Cycle Analysis

We are 11 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on February 11. The alpha high (AH) is imminent and it could form at any time, if it has not already occurred today. Cycle translation is in question. A quick reversal followed by an extended alpha phase decline that moves below the last STCL at 26.05 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended alpha phase rally that moves well above the previous AH at 33.74 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from March 2 to March 16, with our best estimate being in the March 7 to March 11 range.

  • Last STCL: February 11, 2016
  • Cycle Duration: 11 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: March 2 to March 16; best estimate in the March 7 to March 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 close well above congestion resistance in the 34 area would predict a move up toward congestion resistance at the 38 level.
  • Bearish Scenario: A reversal and close below the previous short-term low at 27.30 would reconfirm the long-term downtrend and forecast additional losses.

Both scenarios are equally likely.

Category: Forecasts, Short-term Forecasts


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