Intermediate-term Forecast for March 18, 2017

| March 18, 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 higher 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 we are currently in the speculative blow-off phase of a long-term top that has been forming since late 2014. Technical indicators are bullish overall, strongly favoring a continuation of the uptrend from early 2016.

Cycle Analysis

We are 19 weeks into the rally phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending November 4. A cycle high setup occurred during the week ending March 10, suggesting that the overdue intermediate-term cycle high (ITCH) may have formed during the week ending March 3. A weekly close below 2,365 next week would generate a cycle high signal and indicate that the decline phase of the current cycle is likely in progress. 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 now through April 28, with our best estimate being in the March 24 to April 21 range.

  • Last ITCL: November 4, 2016
  • Cycle Duration: 19 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: Now through April 28; best estimate in the March 24 to April 21 range.
  • Setup Status: Cycle high setup occurred during the week ending March 10.
  • Trigger Status: Cycle high trigger is pending from the week ending March 10, requiring a weekly close below 2,365 next week to generate a cycle high signal.
  • Signal Status: No active signals.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A weekly close above the recent high at 2,383 would reconfirm the long-term uptrend and forecast additional gains.
  • Bearish Scenario: A reversal and close well below uptrend support near 2,210 would predict a move down toward congestion support in the 2,125 area.

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

Cycle Analysis

We are 3 weeks into the rally 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 previous 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 now through April 7.

  • Last ITCH: December 16, 2016
  • Cycle Duration: 13 weeks
  • Cycle Translation: Bullish
  • Next ITCH Window: Now through 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 weekly close above the previous short-term high at 2.60% would reconfirm the uptrend from July and forecast additional gains.
  • Bearish Scenario: A reversal and close well below congestion support in the 2.30% area would confirm the start of a new downtrend and predict additional losses.

The bullish scenario is slightly more likely (~60% 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, returning to recent short-term lows below previous highs of the long-term uptrend. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

A cycle high signal was generated this week, indicating that a half cycle high (HCH) likely formed during the week ending March 3. We are 2 weeks into the first decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending February 3. Cycle translation is in question. A quick rebound followed by an extended rally phase would reconfirm the current bullish translation and favor additional intermediate-term strength. Alternatively, an extended decline phase that moves well below the last ITCL at 99.76 would signal the likely transition to a bearish translation. The window during which the next ITCL is likely to occur is from June 9 to July 28, with our best estimate being in the June 16 to July 14 range.

  • Last ITCL: February 3, 2017
  • Cycle Duration: 6 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: June 9 to July 28; best estimate in the June 16 to July 14 range.
  • Setup Status: Cycle high setup occurred this week.
  • Trigger Status: Cycle high trigger occurred this week.
  • Signal Status: Cycle high signal was generated this week.
  • Stop Level: None active.

Intermediate-term Outlook

  • Bullish Scenario: A rebound and weekly close well above the previous high at 103.06 would reconfirm the long-term uptrend and forecast additional gains.
  • Bearish Scenario: A close well below congestion support in the 100 area would predict a move down toward congestion support at the 93 level.

Both scenarios are equally likely.

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

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 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 now through March 31. The latest ITCL may have formed during the week ending March 10, although we would need to see additional strength next week to confirm that development.

  • Last ITCL: October 7, 2016
  • Cycle Duration: 23 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: Now through March 31.
  • 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 the recent short-term high at 1,259 would reconfirm the uptrend from December and predict a move up toward congestion resistance in the 1,300 area.
  • Bearish Scenario: A reversal and close below the previous short-term low at 1,134 would reconfirm the downtrend from 2016 and forecast additional losses.

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

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 higher this week, moving up toward previous highs of the uptrend from 2016. Technical indicators are effectively neutral overall, suggesting that direction is in question.

Cycle Analysis

We are 3 weeks into the decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending August 5. Cycle translation is in question. An extended decline phase that moves below the ITCL in August at 39.19 would reconfirm the current bearish translation and favor additional intermediate-term weakness. Alternatively, a quick rebound followed by an extended rally phase that moves well above the last intermediate-term cycle high (ITCH) at 55.03 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.

  • Last ITCL: August 5, 2016
  • Cycle Duration: 32 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: Now through 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 well above the previous intermediate-term high at 53.99 would reconfirm the uptrend from 2016 and forecast additional gains.
  • Bearish Scenario: A close below congestion support in the 45 area would predict a move down to congestion support at the 40 level.

Both scenarios are equally likely.

Category: Forecasts, Intermediate-term Forecasts


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