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Weekly Charts for November 19, 2010

|Includes:DIA, GCC, GDX, GLD, IEF, QQQ, SGOL, SPDR S&P 500 Trust ETF (SPY), TLH, UCO, ULE, UUP, YCL

Stock Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the stock markets that we monitor. For short-term outlooks see the latest daily commentary, and for long-term outlooks see the latest big picture update.

The S&P 500 Index

The index closed near unchanged this week, holding below recent highs of the rally from July and continuing a test of the previous long-term high of the cyclical uptrend from early 2009. A subsequent weekly close above 1,224 would reconfirm the cyclical uptrend and forecast a relatively quick move up to strong congestion resistance at the 1,250 level. The character of the next downtrend should provide additional clarity with respect to the formation that has been developing since late 2009. If the next correction returns to congestion support in the 1,065 area, the long-term topping scenario will reassert itself. However, if the next correction is relatively weak and the S&P 500 holds above congestion support in the 1,120 to 1,130 range before returning to long-term highs, a breakout to new cyclical highs will become more likely. Technical indicators are now slightly bullish overall, supporting a continuation of the advance.

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We are 12 weeks into the cycle that followed the Intermediate-Term Cycle Low (ITCL) on August 27. The high of the current cycle remains imminent and may have occurred on November 5, although we would need to see additional weakness during the next few weeks to confirm that development. The window during which the next ITCL is likely to occur is from December 17 to February 18, with our best estimate being somewhere in the December 31 to January 28 range.

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A weekly close above the recent high near 1,224 would reconfirm the cyclical uptrend from early 2009 and forecast a move up to strong congestion resistance in the 1,250 area. A close below congestion support at the 1,150 level would predict a move down to congestion support in the 1,120 to 1,130 range. Both possibilities are equally likely at the moment.

The European Top 100 Index

The index closed slightly lower again this week, retreating from recent highs of the rally from early July. A weekly close above 234 would reconfirm the cyclical uptrend from early 2009 and predict a relatively quick move up to strong congestion resistance in the 240 area. A slight negative divergence has developed between price action and both momentum and oscillators, and technical indicators are now neutral to slightly bullish overall, suggesting that near-term direction is in question with a slight upside bias.

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A weekly close above the previous long-term high at 234 would reconfirm the cyclical uptrend from early 2009 and forecast a move up to strong congestion resistance in the 240 area. A close below short-term uptrend support at current levels would predict a move down to congestion support near 220. Both possibilities are equally likely at the moment.

The Shanghai Composite Index

The index closed moderately lower this week, retreating further from recent highs of the uptrend from July and moving below resistance at the upper boundary of the downtrend from the middle of 2009. Technical indicators remain slightly bullish overall, supporting a continuation of the advance.

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A weekly close above the recent high near 3,150 would reconfirm the uptrend from July and forecast additional gains. A close below congestion support in the 2,800 area would signal the development of a correction and predict a move down to the 2,600 level. Both possibilities are equally likely at the moment.

Treasury Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the US treasury markets that we monitor. For short-term outlooks see the latest daily commentary, and for long-term outlooks see the latest big picture update.

The US 10-year Treasury Note Yield

Yields closed sharply higher again this week, reconfirming the oversold reaction from early October and beginning a test of strong congestion resistance in the 3.00% area. Technical indicators are now moderately bullish overall, supporting a continuation of the advance.

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We monitor cycle highs in yield as they correspond to cycle lows in price. We are 10 weeks into the cycle that followed the Intermediate-Term Cycle High (ITCH) on September 10. The window during which the next ITCH is likely to occur is from December 3 to December 31.

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A weekly close above strong congestion resistance in the 3.00% area would reconfirm the uptrend from early October and forecast additional gains. A reversal and close below new congestion support near 2.62% would predict a move down to the recent long-term low at 2.36%. The uptrend continuation scenario is slightly more likely (~60% probable).

The US 30-year Treasury Bond Yield

Yields closed slightly lower this week, retreating from recent short-term highs of the uptrend from August. Technical indicators remain moderately bullish overall, supporting a continuation of the advance.

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A weekly close well above current levels would reconfirm the uptrend from August and forecast additional gains. A close below power uptrend support at 4.18% would predict a move down to the 4.00% support level. The uptrend continuation scenario is slightly more likely (~60% probable).

Currency Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the currency markets that we monitor. For short-term outlooks see the latest daily commentary, and for long-term outlooks see the latest big picture update.

The US Dollar Index

The index closed moderately higher this week, reacting further off of recent lows and continuing a test of resistance at the upper boundary of the downtrend from June. Technical indicators are now neutral to slightly bearish overall, suggesting that near-term direction is in question with a slight downside bias.

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We are 15 weeks into the cycle that followed the Intermediate-Term Cycle Low (ITCL) on August 6. The window during which the next ITCL is likely to occur is from November 26 to January 21, with our best estimate being somewhere in the December 3 to December 23 range. It is also possible that the low occurred on November 5, although we would need to see additional strength during the next few weeks to confirm that development.

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A weekly close well above current levels would confirm the start of an oversold reaction and predict a move up toward strong congestion resistance in the 80.50 area. A close below the recent low near 76.40 would reconfirm the downtrend from early June and forecast additional losses. Both possibilities are equally likely at the moment.

The European Euro Index

The index closed near unchanged this week, holding below recent highs of the uptrend from June and beginning a test of congestion support in the 135 area. Technical indicators are now neutral to slightly bullish overall, suggesting that near-term direction is in question with a slight upside bias.

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A weekly close well above congestion resistance near 140 would reconfirm the uptrend from June and forecast additional gains. A close below current levels would predict a move down to uptrend support at 134. Both possibilities are equally likely at the moment.

The Japanese Yen Index

The index closed moderately lower this week, breaking well below support at the lower boundary of the power uptrend from May and suggesting the development of an overbought correction. Technical indicators are now effectively neutral overall, suggesting that near-term direction is in question.

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A weekly close above the recent high at 124.40 would reconfirm the long-term uptrend and forecast additional gains. A close below current levels would confirm the break below power uptrend support and reconfirm the developing overbought correction. The correction continuation scenario is slightly more likely (~60% probable).

Precious Metal Weekly Chart Analyses

The following technical and cycle analyses provide intermediate-term forecasts for the precious metal markets that we monitor. For short-term outlooks see the latest daily commentary, and for long-term outlooks see the latest big picture update.

Gold

Gold closed slightly lower this week, retreating further from recent all-time highs and beginning another test of support at the lower boundary of the power uptrend from August. Technical indicators are now slightly bullish overall, supporting a continuation of the advance.

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We are 16 weeks into the cycle that followed the Intermediate-Term Cycle Low (ITCL) on July 30. The high of the cycle may have occurred on November 5, although we would need to see additional weakness during the next few weeks to confirm that development. The window during which the next ITCL is likely to occur is now through January 7, with our best estimate being somewhere in the November 26 to December 17 range.

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A weekly close well above the recent high near $1,395 would reconfirm the long-term uptrend and forecast additional gains. A close below power uptrend support at current levels would predict a move down toward congestion support in the $1,250 area. The uptrend continuation scenario is slightly more likely (~60% probable).

The Gold Currency Index

The Gold Currency Index (NYSE:GCI) is a composite of gold prices in the currencies of 10 of the largest economies in the world as defined by GDP. It is therefore currency independent, reflecting the intrinsic value of gold as an international currency itself.

The GCI closed slightly lower again this week, retreating further from recent all-time highs and beginning a test of support at the lower boundary of the power uptrend from August. Technical indicators are now slightly bullish overall, supporting a continuation of the advance.

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A weekly close above the recent high at 33.80 would reconfirm the long-term uptrend and forecast additional gains. A close below power uptrend support at current levels would predict a move down to long-term uptrend support near 32. The uptrend continuation scenario is slightly more likely (~60% probable).

The Gold Miners Index

The index closed slightly lower this week, retreating from recent all-time highs of the long-term uptrend. Technical indicators remain moderately bullish overall, supporting a continuation of the advance.

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A weekly close well above the recent high near 1,660 would reconfirm the long-term uptrend and forecast additional gains. A close below congestion support at the 1,500 level would suggest the development of a more substantial correction. The uptrend continuation scenario is slightly more likely (~60% probable).

Commodity Weekly Chart Analyses

The following technical analyses provide intermediate-term forecasts for the commodity markets that we monitor. For short-term outlooks see the latest daily commentary, and for long-term outlooks see the latest big picture update.

The Continuous Commodity Index

The index closed near unchanged this week, holding below recent highs of the long-term uptrend. Technical indicators are now slightly bullish overall, supporting a continuation of the advance.

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A weekly close above the recent high near 588 would reconfirm the long-term uptrend and forecast additional gains. A close below current levels would suggest that start of at least a short-term overbought correction and predict a move down to power uptrend support near 545. Both possibilities are equally likely at the moment.

Oil

Oil closed moderately lower again this week, retreating from recent long-term highs and beginning a test of congestion support in the $80 area. Technical indicators are slightly bullish overall, supporting a continuation of the advance.

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A weekly close well above congestion resistance near $89 would reconfirm the cyclical uptrend from early 2009 and forecast additional gains. A close below congestion support in the $80 area would predict a move down to uptrend support at $76. Both possibilities are equally likely at the moment.

Disclosure: No positions

Stocks: SPY, DIA, QQQ, IEF, TLH, UUP, ULE, YCL, GLD, SGOL, GDX, GCC, UCO