Short-term Forecast for September 1, 2016

| September 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 near unchanged today, holding below previous highs of the uptrend from February. Technical indicators are essentially neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 7 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on June 27. The shallow magnitude of the last alpha phase decline 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 now through September 6.

  • Last STCL: June 27, 2016
  • Cycle Duration: 48 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: Now through September 6.
  • 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 recent short-term high at 2,190 would reconfirm the uptrend from February and forecast additional gains.
  • Bearish Scenario: A close well below congestion support in the 2,160 area would predict a return to congestion support at the 2,100 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 slightly higher today, holding below previous highs of the uptrend from July. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 14 sessions into the rally phase of the cycle following the short-term cycle high (STCH) on August 8. Cycle translation is in question. A quick reversal followed by an extended decline phase that moves below the alpha low (AL) in early July at 1.34% would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended rally phase that moves well above the STCH in July at 1.63% would signal the likely transition to a bullish translation. The window during which the next STCH is likely to occur is now through September 20, with our best estimate being now through September 7. The latest STCH may have formed on August 26, although we would need to see additional weakness to confirm that development.

  • Last STCH: August 8, 2016
  • Cycle Duration: 18 sessions
  • Cycle Translation: Bearish
  • Next STCH Window: Now through September 20; best estimate now through September 7.
  • 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 1.64% would predict a move up to congestion resistance in the 1.70% area.
  • Bearish Scenario: A close below the previous short-term low at 1.34% would reconfirm the downtrend from 2015 and forecast additional losses.

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 moderately lower today, retreating from recent short-term highs below previous highs of the uptrend from June. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

A cycle high signal was nearly generated today, indicating that the alpha high (AH) of the current cycle likely formed on August 31. We are 2 sessions into the alpha phase decline of the cycle following the short-term cycle low (STCL) on August 18. An extended alpha phase decline that moves below the last STCL at 94.14 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, a quick rebound followed by an extended beta phase rally would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is from September 14 to September 28, with our best estimate being in the September 19 to September 23 range.

  • Last STCL: August 18, 2016
  • Cycle Duration: 10 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: September 14 to September 28; best estimate in the September 19 to September 23 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 congestion resistance at the 96.50 level would predict a move up to the previous short-term high at 97.52.
  • Bearish Scenario: A reversal and close below the previous short-term low at 94.14 would predict a move down to congestion support in the 93.50 area.

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, reacting off of recent lows of the downtrend from early August. Technical indicators are moderately bearish overall, favoring a continuation of the decline.

We are 3 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on August 12. A cycle low setup occurred today, suggesting that the latest STCL may have formed on August 31. A close above current levels during the next session would generate a cycle low signal and indicate that the next cycle is likely in progress. The magnitude and duration of the last alpha 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 now through September 12, with our best estimate being now through September 7.

  • Last STCL: August 12, 2016
  • Cycle Duration: 14 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through September 12; best estimate now through September 7.
  • Setup Status: Cycle low setup occurred today.
  • Trigger Status: Cycle low trigger is pending from today, requiring a close above current levels 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 rebound and close above the previous short-term high at 1,373 would reconfirm the uptrend from December and forecast additional gains.
  • Bearish Scenario: A close below the recent short-term low at 1,311 would predict a move down to congestion support in the 1,300 area.

The bearish 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 sharply lower today, moving down to a new short-term low below previous highs of the uptrend from early August. Technical indicators are slightly bearish overall, tentatively favoring a continuation of the decline from August.

Cycle Analysis

We are 4 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on August 2. The magnitude and duration of the last alpha phase rally suggests that cycle translation is in question. An extended beta phase decline that moves below the last STCL at 39.51 would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, a quick rebound followed by an extended alpha phase rally would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is now through September 8.

  • Last STCL: August 2, 2016
  • Cycle Duration: 22 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through September 8.
  • 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 49.11 would predict a move up to the previous high of the uptrend from February at 51.53.
  • Bearish Scenario: A close well below congestion support in the 44 area would predict a move down toward the previous short-term low at 39.51.

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

Category: Forecasts, Short-term Forecasts


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