Short-term Forecast for May 2, 2016

| May 2, 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 higher today, returning to support at the lower boundary of the uptrend from February. Technical indicators are slightly bullish overall, tentatively favoring a return to previous highs of the advance. However, the uptrend has moved higher at an unsustainable rate and it will likely be followed by a violent overbought correction.

Cycle Analysis

We are 8 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on April 11. The beta low (BL) may have formed on April 29, although we would need to see additional strength to confirm that development. The magnitude and duration of the last alpha 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 May 20 to June 10, with our best estimate being in the June 2 to June 8 range.

  • Last STCL: April 11, 2016
  • Cycle Duration: 15 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: May 20 to June 10; best estimate in the June 2 to June 8 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 at the 2,100 level would reconfirm the uptrend from February and forecast additional gains.
  • Bearish Scenario: A close below the recent short-term low at 2,065 would predict a return to congestion support in the 2,040 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 sharply higher today, reacting off of recent short-term lows below previous highs of the uptrend from February. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Cycle Analysis

We are 4 sessions into the decline phase of the cycle following the short-term cycle high (STCH) on April 26. Cycle translation is in question. A quick rebound followed by an extended rally phase that moves above the STCH in March at 1.98% would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, an extended decline phase that moves well below the last alpha low (AL) at 1.69% would signal the likely transition to a bearish translation. The window during which the next STCH is likely to occur is from May 17 to June 8, with our best estimate being in the May 23 to May 27 range.

  • Last STCH: April 26, 2016
  • Cycle Duration: 4 sessions
  • Cycle Translation: Bullish
  • Next STCH Window: May 17 to June 8; best estimate in the May 23 to May 27 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 the recent short-term high at 1.93% would predict a move up to congestion resistance in the 1.98% area.
  • Bearish Scenario: A close below the middle of the Bollinger bands at 1.80% would forecast a return to congestion support at the 1.70% 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 sharply lower today, moving down to a new low for the downtrend from December. Technical indicators are extremely bearish overall, strongly favoring a continuation of the decline.

Cycle Analysis

We are 6 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on April 12. The magnitude and duration of the alpha 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 May 6 to May 20, with our best estimate being in the May 11 to May 17 range.

  • Last STCL: April 12, 2016
  • Cycle Duration: 14 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: May 6 to May 20; best estimate in the May 11 to May 17 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 94 area would predict a return to the previous short-term high at 95.08.
  • Bearish Scenario: A close below current levels would reconfirm the downtrend from December and forecast additional losses.

The bearish scenario is highly likely (>80% 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 slightly lower today, holding near recent highs of the uptrend from December. Technical indicators are bullish overall, strongly favoring a continuation of the advance.

We are 6 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on April 22. The magnitude and duration of the alpha phase rally signals the likely transition to a bullish translation and favors additional short-term strength. The window during which the next STCL is likely to occur is from May 10 to May 20, with our best estimate being in the May 11 to May 17 range.

  • Last STCL: April 22, 2016
  • Cycle Duration: 6 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: May 10 to May 20; best estimate in the May 11 to May 17 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 current levels would reconfirm the uptrend from December and forecast additional gains.
  • Bearish Scenario: A reversal and close below the previous short-term low at 1,216 would predict a move down toward congestion support in the 1,185 area.

The bullish scenario is highly likely (>80% 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 lower today, retreating from recent highs of the uptrend from February. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

A cycle high signal was generated today, indicating that the alpha high (AH) of the current cycle likely formed on April 29. We are 1 session into the alpha phase decline of the cycle following the short-term cycle low (STCL) on April 25. A quick rebound followed by an extended beta phase rally that moves well above the last AH at 45.99 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, an extended alpha phase decline that moves well below the last STCL at 42.96 would signal the likely transition to a bearish translation. The window during which the next STCL is likely to occur is from May 12 to May 26, with our best estimate being in the May 17 to May 23 range.

  • Last STCL: April 25, 2016
  • Cycle Duration: 5 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: May 12 to May 26; best estimate in the May 17 to May 23 range.
  • Setup Status: Cycle high setup occurred today.
  • Trigger Status: Cycle high trigger occurred today.
  • Signal Status: Cycle high signal was generated today.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A rebound and close above the recent short-term high at 45.99 would reconfirm the uptrend from February and forecast additional gains.
  • Bearish Scenario: A close below the middle of the Bollinger bands at 42.41 would predict a return to congestion support in the 38 area.

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

Category: Forecasts, Short-term Forecasts


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