Short-term Forecast for July 1, 2016

| July 1, 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 slightly higher today, holding 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

A cycle low signal was nearly generated today, indicating that the latest short-term cycle low (STCL) likely formed on June 27. We are 4 sessions into the alpha phase rally of the cycle following the STCL on June 27. Cycle translation is in question. A quick reversal followed by an extended alpha phase decline that moves below the last STCL at 1,992 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended alpha phase rally that moves well above the last alpha high (AH) at 2,119 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from August 5 to August 25, with our best estimate being in the August 17 to August 23 range.

  • Last STCL: June 27, 2016
  • Cycle Duration: 4 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: August 5 to August 25; best estimate in the August 17 to August 23 range.
  • Setup Status: Cycle low setup occurred on June 29.
  • Trigger Status: Cycle low trigger is pending from June 29, requiring a close above 2,104 during the next session to generate a cycle low signal.
  • Signal Status: No active signals.
  • Stop Level: None active.

Short-term Outlook

  • Bullish Scenario: A close above the previous short-term high at 2,119 would reconfirm the uptrend from February and forecast additional gains.
  • Bearish Scenario: A reversal and close well below congestion support in the 2,000 area would reconfirm the downtrend from early June and predict a move down to congestion support at the 1,940 level.

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 lower today, moving down to a new low for the downtrend from 2015. Technical indicators are bearish overall, strongly favoring a continuation of the decline.

Cycle Analysis

We are 6 sessions into the decline phase of the cycle following the short-term cycle high (STCH) on June 23. The magnitude of the current decline phase reconfirms the current bearish translation and favors additional short-term weakness. The window during which the next STCH is likely to occur is from July 15 to August 5, with our best estimate being in the July 21 to July 27 range.

  • Last STCH: June 23, 2016
  • Cycle Duration: 6 sessions
  • Cycle Translation: Bearish
  • Next STCH Window: July 15 to August 5; best estimate in the July 21 to July 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 well above the middle of the Bollinger bands at 1.61% would predict a move up toward the previous short-term high at 1.74%.
  • Bearish Scenario: A close well below the recent short-term low at 1.43% would reconfirm the downtrend from 2015 and forecast additional losses.

The bearish scenario is more likely (~70% 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 moderately lower today, retreating from previous highs of the uptrend from May. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

We are 6 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on June 23. The magnitude of the current 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 July 20 to August 3, with our best estimate being in the July 25 to July 29 range.

  • Last STCL: June 23, 2016
  • Cycle Duration: 6 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: July 20 to August 3; best estimate in the July 25 to July 29 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 recent short-term high at 96.70 would reconfirm the uptrend from early May and forecast additional gains.
  • Bearish Scenario: A reversal and close well below congestion support in the 93.50 area would predict a return to the previous short-term low at 92.62.

The bullish scenario is more likely (~70% 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 sharply higher today, moving up to a new high for the uptrend from December. Technical indicators are extremely 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 June 23. The magnitude of the current 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 July 12 to July 22, with our best estimate being in the July 13 to July 19 range.

  • Last STCL: June 23, 2016
  • Cycle Duration: 6 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: July 12 to July 22; best estimate in the July 13 to July 19 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 December and forecast additional gains.
  • Bearish Scenario: A reversal and close below congestion support in the 1,215 area would signal the likely start of a new downtrend and predict a move down toward congestion support at the 1,160 level.

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 higher today, moving up toward previous highs of the uptrend from February. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 4 sessions into the alpha phase rally of the cycle following the short-term cycle low (STCL) on June 27. Cycle translation is in question. An extended alpha phase rally that moves well above the last alpha high (AH) at 51.53 would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, a quick reversal followed by an extended alpha phase decline that moves well below the last STCL at 45.83 would signal the likely transition to a bearish translation. The window during which the next STCL is likely to occur is from July 15 to July 29, with our best estimate being in the July 20 to July 26 range.

  • Last STCL: June 27, 2016
  • Cycle Duration: 4 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: July 15 to July 29; best estimate in the July 20 to July 26 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 previous short-term high at 51.45 would reconfirm the uptrend from February and forecast additional gains.
  • Bearish Scenario: A close below the recent short-term low at 46.59 would predict a move down to congestion support in the 44 area.

Both scenarios are equally likely.

Category: Forecasts, Short-term Forecasts


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