Short-term Forecast for January 3, 2017

| January 3, 2017

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, moving up toward previous highs of the long-term uptrend. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Cycle Analysis

We are 13 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on November 4. 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 now through January 9, with our best estimate being now through January 6. The latest STCL may have formed on December 30, although we would need to see additional strength to confirm that development.

  • Last STCL: November 4, 2016
  • Cycle Duration: 37 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: Now through January 9; best estimate now through January 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 previous short-term high at 2,272 would reconfirm the long-term uptrend and forecast additional gains.
  • Bearish Scenario: A reversal and close below the recent short-term low at 2,239 would predict a move down toward congestion support in the 2,190 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 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 12 sessions into the decline phase of the cycle following the short-term cycle high (STCH) on December 15. The magnitude and duration of the last rally phase reconfirms the current bullish translation and favors additional short-term strength. The window during which the next STCH is likely to occur is from January 6 to January 27, with our best estimate being in the January 13 to January 20 range.

  • Last STCH: December 15, 2016
  • Cycle Duration: 12 sessions
  • Cycle Translation: Bullish
  • Next STCH Window: January 6 to January 27; best estimate in the January 13 to January 20 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 2.62% would reconfirm the uptrend from July and forecast additional gains.
  • Bearish Scenario: A close well below current levels would predict a move down toward power uptrend support near 2.20%.

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 higher today, returning to previous highs of the uptrend from August. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the advance.

Cycle Analysis

We are 8 sessions into the beta phase decline of the cycle following the short-term cycle low (STCL) on December 1. 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 now through January 4. The latest STCL may have formed on December 30, although we would need to see additional strength to confirm that development.

  • Last STCL: December 1, 2016
  • Cycle Duration: 39 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: Now through January 4.
  • 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 previous short-term high at 103.29 would reconfirm the uptrend from August and forecast additional gains.
  • Bearish Scenario: A reversal and close well below the middle of the Bollinger bands at 102.15 would predict a move down toward the bottom of the Bollinger bands at 99.94.

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 moderately higher today, returning to recent short-term highs above previous lows of the downtrend from August. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

We are 6 sessions into the beta phase rally of the cycle following the short-term cycle low (STCL) on December 15. The beta high (BH) is imminent and it could form at any time. Cycle translation is in question. A quick reversal followed by an extended alpha phase decline would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, an extended beta phase rally that moves well above the previous BH at 1,168 would signal the likely transition to a bullish translation. The window during which the next STCL is likely to occur is now through January 13, with our best estimate being in the January 5 to January 11 range.

  • Last STCL: December 15, 2016
  • Cycle Duration: 11 sessions
  • Cycle Translation: Bearish
  • Next STCL Window: Now through January 13; best estimate in the January 5 to January 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 current levels would predict a move up toward the top of the Bollinger bands at 1,184.
  • Bearish Scenario: A reversal and close below the previous short-term low at 1,130 would reconfirm the downtrend from August and forecast additional losses.

The bullish scenario is slightly more likely (~60% 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, retreating from recent highs of the uptrend from August. Technical indicators are neutral to slightly bullish overall, suggesting that direction is in question with a slight upward bias.

Cycle Analysis

We are 1 session into the beta phase decline of the cycle following the short-term cycle low (STCL) on December 15. Cycle translation is in question. A quick rebound followed by an extended alpha phase rally would reconfirm the current bullish translation and favor additional short-term strength. Alternatively, an extended beta phase decline that moves well below the STCL in early September at 43.16 would signal the likely transition to a bearish translation. The window during which the next STCL is likely to occur is now through January 19, with our best estimate being in the January 4 to January 10 range.

  • Last STCL: December 15, 2016
  • Cycle Duration: 12 sessions
  • Cycle Translation: Bullish
  • Next STCL Window: Now through January 19; best estimate in the January 4 to January 10 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 recent short-term high at 54.06 would reconfirm the uptrend from August and forecast additional gains.
  • Bearish Scenario: A close well congestion support at the 50 level would predict a move down toward congestion support in the 43 area.

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

Category: Forecasts, Short-term Forecasts


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