Intermediate-term Forecast for September 2, 2017

| September 2, 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 moderately higher this week, returning to previous 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 moderately bullish overall, favoring a continuation of the uptrend from early 2016.

Cycle Analysis

We are 4 weeks into the second decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending April 13. A cycle low signal was nearly generated this week, indicating that the latest ITCL may have formed during the week ending August 25. A close above current levels next week would generate a cycle low signal and indicate that the next cycle is likely in progress. The magnitude and duration of the first rally phase of the current cycle 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 October 6, with our best estimate being now through September 29.

  • Last ITCL: April 13, 2017
  • Cycle Duration: 20 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: Now through October 6; best estimate now through September 29.
  • 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 long-term high at 2,477 would reconfirm the cyclical uptrend and forecast additional gains.
  • Bearish Scenario: A close below the middle of the Bollinger bands at 2,429 would predict a move down to uptrend support near 2,380.

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 slightly lower this week, holding above previous lows of the downtrend from late 2016. Technical indicators are moderately bearish overall, favoring a continuation of the decline.

Cycle Analysis

We are 8 weeks into the decline phase of the cycle following the intermediate-term cycle high (ITCH) that occurred during the week ending July 7. An extended decline phase that moves below the last half cycle low (HCL) at 2.14% 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 ITCH at 2.40% would signal the likely transition to a bullish translation. The window during which the next ITCH is likely to occur is from September 29 to October 27.

  • Last ITCH: July 7, 2017
  • Cycle Duration: 8 weeks
  • Cycle Translation: Bearish
  • Next ITCH Window: September 29 to October 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 above the recent short-term high at 2.40% would predict a return to the previous short-term high at 2.60%.
  • Bearish Scenario: A close below the recent short-term low at 2.14% would reconfirm the downtrend from December and predict additional losses.

The bearish 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 slightly higher this week, holding near recent lows of the downtrend from December and continuing a test of congestion support in the 93 area. Technical indicators are bearish overall, strongly favoring a continuation of the decline.

Cycle Analysis

We are 21 weeks into the second decline phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending February 3. The magnitude and duration of the current decline phase signals the likely transition to a bearish translation and favors additional intermediate-term weakness. The window during which the next ITCL is likely to occur is now through September 8.

  • Last ITCL: February 3, 2017
  • Cycle Duration: 30 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: Now through September 8.
  • 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 downtrend resistance near 93.60 would predict a move up toward the middle of the Bollinger bands at 95.83.
  • Bearish Scenario: A close well below congestion support at the 93 level would reconfirm the downtrend from December and forecast additional losses.

The bearish scenario is more likely (~70% 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, moving up to a new high for the uptrend from December. Technical indicators are bullish overall, strongly favoring a continuation of the advance.

Cycle Analysis

We are 8 weeks into the second rally phase of the cycle following the intermediate-term cycle low (ITCL) that occurred during the week ending May 12. An extended advance phase that moves above the recent intermediate-term high in April at 1,292 would reconfirm the current bullish translation and favors additional intermediate-term strength. Alternatively, a quick reversal followed by an extended decline phase that moves well below the last ITCL at 1,214 would signal the likely transition to a bearish translation. The window during which the next ITCL is likely to occur is now through October 13, with our best estimate being in the September 8 to October 6 range.

  • Last ITCL: May 12, 2017
  • Cycle Duration: 17 weeks
  • Cycle Translation: Bullish
  • Next ITCL Window: Now through October 13; best estimate in the┬áSeptember 8 to October 6 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 current levels would reconfirm the uptrend from December and forecast additional gains.
  • Bearish Scenario: A reversal and close below the middle of the Bollinger bands at 1,264 would predict a return to congestion support at the 1,200 level.

The bullish scenario is highly likely (>80% 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 slightly lower this week, holding above previous lows of the downtrend from February. Technical indicators are neutral to slightly bearish overall, suggesting that direction is in question with a slight downward bias.

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 June 23. A quick reversal followed by an extended decline phase that moves below the last ITCL at 42.05 would reconfirm the current bearish translation and favor additional intermediate-term weakness. Alternatively, an extended rally phase that moves well above the intermediate-term cycle high (ITCH) in January at 55.24 would signal the likely transition to a bullish translation. The window during which the next ITCL is likely to occur is from October 6 to February 23, with our best estimate being in the December 1 to December 29 range.

  • Last ITCL: June 23, 2017
  • Cycle Duration: 10 weeks
  • Cycle Translation: Bearish
  • Next ITCL Window: October 6 to February 23; best estimate in the December 1 to December 29 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 rebound and weekly close above the previous intermediate-term high at 53.99 would reconfirm the uptrend from 2016 and forecast additional gains.
  • Bearish Scenario: A close below the recent short-term low at 43.01 would predict a move down to congestion support at the 40 level.

Both scenarios are equally likely.

Category: Forecasts, Intermediate-term Forecasts


Comments are closed.