Intermediate-term Forecast for January 14, 2017

| January 14, 2017

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 slightly lower this week, holding near recent highs of the cyclical bull market from 2009. Although the index has moved up to new nominal all-time highs, it remains likely that a long-term top is forming. A reversal and 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 moderately bullish overall, favoring a continuation of the uptrend from early 2016.

Cycle Analysis

We are 10 weeks into the rally phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending November 4. The magnitude and duration of the current rally phase reconfirms the current bullish translation and favors additional intermediate-term strength. The window during which the next ITCL is likely to occur is from February 24 to April 28, with our best estimate being in the March 24 to April 21 range.

  • Last ITCL: November 4, 2016
  • Cycle Duration: 10 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: February 24 to April 28; best estimate in the March 24 to April 21 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 current levels would reconfirm the long-term uptrend and forecast additional gains.
  • Bearish Scenario: A reversal and close well below uptrend support near 2,160 would predict a return to the previous short-term low at 2,085.

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

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 slightly lower this week, holding below previous highs of the uptrend from July. Technical indicators are moderately bullish overall, favoring a continuation of the advance.

Cycle Analysis

We are 4 weeks into the decline phase of the cycle following the intermediate-term cycle high (ITCH) that occurred during the week ending December 16. The magnitude and duration of the last rally phase reconfirms the current bullish translation and favors additional intermediate-term strength. The window during which the next ITCH is likely to occur is from March 10 to April 7.

  • Last ITCH: December 16, 2016
  • Cycle Duration: 4 weeks
  • Cycle Translation: Bullish
  • Next ITCH Window: March 10 to April 7.
  • 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 recent short-term high at 2.60% would reconfirm the uptrend from July and forecast additional gains.
  • Bearish Scenario: A close below congestion support in the 2.30% area would predict a move down toward the middle of the Bollinger bands at 2.06%.

The bullish 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 moderately lower this week, retreating further from previous highs of the long-term uptrend. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the uptrend from May.

Cycle Analysis

We are 3 weeks into the second decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending August 19. The magnitude and duration of the last rally phase reconfirms the current bullish translation and favors additional intermediate-term strength. The window during which the next ITCL is likely to occur is now through February 10, with our best estimate being now through January 27.

  • Last ITCL: August 19, 2016
  • Cycle Duration: 22 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: Now through February 10; best estimate now through January 27.
  • 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 well above the recent high at 103.06 would reconfirm the long-term uptrend and forecast additional gains.
  • Bearish Scenario: A close below the middle of the Bollinger bands at 99.12 would predict a move down toward congestion support at the 93 level.

The bullish scenario is slightly more likely (~60% 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, reacting further off of previous lows of the downtrend from July. Technical indicators are slightly bearish overall, tentatively favoring a continuation of the decline.

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 October 7. 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 January 27 to March 17, with our best estimate being in the February 10 to March 10 range.

  • Last ITCL: October 7, 2016
  • Cycle Duration: 14 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: January 27 to March 17; best estimate in the February 10 to March 10 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 congestion resistance in the 1,200 area would predict a move up toward the middle of the Bollinger bands at 1,243.
  • Bearish Scenario: A reversal and close below the previous short-term low at 1,134 would reconfirm the downtrend from July and forecast additional losses.

Both scenarios are equally likely.

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 lower this week, retreating from recent highs of the uptrend from February. Technical indicators are slightly bullish overall, tentatively favoring a continuation of the advance.

Cycle Analysis

We are 24 weeks into the rally phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending August 5. Cycle translation is in question. A quick reversal followed by an extended decline phase that moves below the ITCL in February at 26.05 would reconfirm the current bearish translation and favor additional intermediate-term weakness. Alternatively, an extended rally phase that moves well above the last intermediate-term cycle high (ITCH) at 49.56 would signal the likely transition to a bullish translation. The window during which the next ITCL is likely to occur is now through April 7, with our best estimate being in the February 10 to March 10 range.

  • Last ITCL: August 5, 2016
  • Cycle Duration: 24 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: Now through April 7; best estimate in the February 10 to March 10 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 the recent intermediate-term high at 53.99 would reconfirm the uptrend from February and forecast additional gains.
  • Bearish Scenario: A reversal and close below congestion support in the 40 area would predict a move down toward congestion support at the 30 level.

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

Category: Forecasts, Intermediate-term Forecasts


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