Intermediate-term Forecast for April 30, 2016

| April 30, 2016

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 from recent short-term highs below previous long-term highs of the cyclical bull market from 2009. A reversal followed by a weekly close well below critical congestion support in the 1,875 area would confirm the start of a new cyclical downtrend and forecast substantial losses during the next 12 to 18 months. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Cycle Analysis

We are 11 weeks into the rally phase of the cycle following the intermediate-term low (ITCL) that occurred during the week ending February 12. A cycle high signal was nearly generated this week, suggesting that the intermediate-term cycle high (ITCH) may have formed during the week ending April 22. A close below current levels next week would generate a cycle high signal and indicate that the decline phase of the current cycle is likely in progress. The magnitude and duration of the last decline phase reconfirms the current bearish translation and favors additional intermediate-term weakness. The window during which the next ITCL is likely to occur is from June 3 to August 5, with our best estimate being in the July 1 to July 29 range.

  • Last ITCL: February 12, 2016
  • Cycle Duration: 11 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: June 3 to August 5; best estimate in the July 1 to July 29 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 above the recent short-term high at 2,092 would predict a return to congestion resistance at the 2,125 level.
  • Bearish Scenario: A reversal and close below the middle of the Bollinger bands at 1,992 would predict a move down toward congestion support in the 1,875 area.

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, moving down toward previous lows of the downtrend from 2014. Technical indicators are moderately bearish overall, favoring a continuation of the decline.

Cycle Analysis

We are 3 weeks into the first rally phase of the cycle following the intermediate-term cycle high (ITCH) that occurred during the week ending March 11. The magnitude and duration of the previous decline phase reconfirms the current bearish translation and favors additional intermediate-term weakness. The window during which the next ITCH is likely to occur is from June 10 to July 8.

  • Last ITCH: March 11, 2016
  • Cycle Duration: 7 weeks
  • Cycle Translation: Bearish
  • Next ITCH Window: June 10 to July 8.
  • 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 congestion resistance in the 2.00% area would predict a move up toward downtrend resistance near 2.19%.
  • Bearish Scenario: A reversal and close below the recent short-term low at 1.72% would forecast a return to the previous low of the downtrend from 2014 at 1.67%.

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 sharply lower this week, moving down to a new short-term low below the bottom of the recent trading range. The index has been confined to a trading range between 94 and 100 since early 2015 and a weekly 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 bearish overall, strongly favoring a confirmed break below the bottom of the trading range.

Cycle Analysis

We are 3 weeks into the second rally phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending February 12. The half cycle high (HCH) may have formed during the week ending April 22, although we would need to see additional weakness next week to confirm that development. The quick move below the last 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 from June 17 to August 5, with our best estimate being in the June 24 to July 22 range.

  • Last ITCL: February 12, 2016
  • Cycle Duration: 11 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: June 17 to August 5; best estimate in the June 24 to July 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 above the middle of the Bollinger bands at 96.83 would predict a return to congestion resistance at the top of the current trading range in the 100 area.
  • Bearish Scenario: A close below current levels would confirm the break below congestion support at the bottom of the recent trading range 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 sharply higher this week, moving up to a new high for the uptrend from January and beginning a test of congestion resistance in the 1,300 area. Technical indicators are bullish overall, strongly favoring a continuation of the advance.

Cycle Analysis

A cycle low signal was generated this week, indicating that the latest intermediate-term cycle low (ITCL) likely formed during the week ending March 25. We are 5 weeks into the rally phase of the cycle following the ITCL that occurred during the week ending March 25. The magnitude and duration of the previous rally phase 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 from July 15 to September 2, with our best estimate being in the July 15 to August 12 range.

  • Last ITCL: March 25, 2016
  • Cycle Duration: 5 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: July 15 to September 2; best estimate in the July 15 to August 12 range.
  • Setup Status: Cycle low setup occurred this week.
  • Trigger Status: Cycle low trigger occurred this week.
  • Signal Status: Cycle low signal was generated this week.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A weekly close well above┬ácongestion resistance in the 1,300 area would reconfirm the uptrend from January and forecast additional gains.
  • Bearish Scenario: A reversal and close below congestion support at the 1,200 level would predict a return to congestion support in the 1,160 area.

The bullish scenario is highly likely (>80% 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 moderately higher this week, moving up to a new high for the uptrend from February above congestion resistance in the 45 area. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the uptrend from February.

Cycle Analysis

We are 11 weeks into the rally phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending February 12. A quick reversal followed by an extended decline phase that moves below the last ITCL at 26.05 would reconfirm the current bearish translation and favor additional intermediate-term weakness. Alternatively, an extended rally phase that approaches the last intermediate-term cycle high (ITCH) at 49.49 would suggest that cycle translation is in question. The window during which the next ITCL is likely to occur is now through September 16, with our best estimate being in the June 24 to July 22 range.

  • Last ITCL: February 12, 2016
  • Cycle Duration: 11 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: Now through to September 16; best estimate in the June 24 to July 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 weekly close well above congestion resistance in the 45 area would reconfirm the uptrend from February and forecast additional gains.
  • Bearish Scenario: A reversal and close below the middle of the Bollinger bands at 36.32 would predict a return to the previous long-term low at 29.02.

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

Category: Forecasts, Intermediate-term Forecasts


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