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Erik McCurdy
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Erik is the senior market technician for Prometheus Market Insight and has been performing chart analysis since 1995. The software program that he developed to monitor long-term stock market trends has correctly identified 92% of the cyclical turning points in the S&P 500 index since 1940. His... More
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  • Weekly Charts for April 9, 2011 0 comments
    Apr 10, 2011 1:26 PM | about stocks: SPY, YINN, IEF, TLH, UUP, ULE, YCL, GLD, SGOL, GDX, UCO, GCC

    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

    Technical Analysis

    The index closed slightly lower this week, holding below recent long-term highs of the cyclical uptrend from early 2009. Technical indicators remain moderately bullish overall, supporting a continuation of the advance.

    Cycle Analysis

    We are 3 weeks into the cycle following the Intermediate-Term Cycle Low (ITCL) that occurred during the week ending March 18. Cycle translation is still assumed to be right, but a move up to meaningful new long-term highs during the next few weeks would be required to confirm the bullish bias. A failure to break out followed by a quick return to the latest ITCL would indicate a transition to left translation and forecast the development of a potentially violent overbought correction. The window during which the next ITCL is likely to occur is from July 8 to September 9, with our best estimate being in the August 5 to September 2 range.

    • Last ITCL: March 18, 2011
    • Cycle Duration: 3 weeks
    • Cycle Translation: Right (bullish)
    • Next ITCL Window: July 8 to September 9; best estimate in the August 5 to September 2 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 long-term high at 1,343 would reconfirm the cyclical uptrend and forecast additional gains.
    • Bearish Scenario: A quick reversal and close below the recent low near 1,279 would reconfirm the downtrend from February and predict additional losses.

    Both scenarios are equally likely at the moment.

    The European Top 100 Index

    Technical Analysis

    The index closed slightly higher this week, reacting further off of recent lows of the downtrend from February and beginning a test of congestion resistance in the 240 area. Technical indicators remain slightly bullish overall, tentatively supporting a return to previous long-term highs.

    Intermediate-term Outlook

    • Bullish Scenario: A weekly close above congestion resistance in the 240 area would predict a return to the recent long-term high near 247.
    • Bearish Scenario: A close below the recent low near 225 would reconfirm the downtrend from February and forecast additional losses.

    Both scenarios are equally likely at the moment.

    The Shanghai Composite Index

    Technical Analysis

    The index closed moderately higher this week, moving up to resistance at the upper boundary of the long-term downtrend from 2009. Technical indicators are now moderately bullish overall, supporting a move above downtrend resistance.

    Intermediate-term Outlook

    • Bullish Scenario: A weekly close well above downtrend resistance at current levels would reconfirm the uptrend from July 2010 and forecast additional gains.
    • Bearish Scenario: A reversal and close below nearby congestion support in the 2,870 area would predict a return to the previous low near 2,710.

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

    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

    Technical Analysis

    Yields closed moderately higher this week, moving up toward previous highs of the uptrend from October 2010. Technical indicators are now slightly bullish overall, tentatively supporting a continuation of the advance.

    Cycle Analysis

    We are 8 weeks into the cycle following the Intermediate-Term Cycle High (ITCH) that occurred during the week ending February 11. If the forthcoming Half Cycle High (NYSE:HCH) forms well below the last ITCH, a transition to left translation would be suggested and additional losses would be forecast during the next 2 months. The window during which the next ITCH is likely to occur is from May 6 to June 3.

    • Last ITCH: February 11, 2011
    • Cycle Duration: 8 weeks
    • Cycle Translation: Right (bullish)
    • Next ITCH Window: May 6 to June 3.
    • 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 high near 3.67% would reconfirm the uptrend from October 2010 and predict a move up to congestion resistance in the 3.84% area.
    • Bearish Scenario: A close below the recent low near 3.28% would reconfirm the downtrend from February and forecast additional losses.

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

    The US 30-year Treasury Bond Yield

    Technical Analysis

    Yields closed sharply higher this week, moving up toward previous highs of the uptrend from October 2010. Technical indicators are now slightly bullish overall, tentatively supporting a return to previous highs.

    Intermediate-term Outlook

    • Bullish Scenario: A weekly close well above strong congestion resistance at the 4.80% level would reconfirm the uptrend from August 2010 and forecast additional gains.
    • Bearish Scenario: A close below congestion support in the 4.40% area would reconfirm the downtrend from early February and predict additional losses.

    Both scenarios are equally likely at the moment.

    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

    Technical Analysis

    The index closed sharply lower this week, moving down to a new low for the downtrend from June 2010 and beginning a test of congestion support in the 75 area. Technical indicators are now bearish overall, strongly supporting a continuation of the decline.

    Cycle Analysis

    We are 22 weeks into the cycle following the Intermediate-Term Cycle Low (ITCL) that occurred during the week ending November 5. The sharp move lower this week has cleared the cycle low setup that formed last week. The next ITCL is imminent and will likely occur sometime during the next 3 weeks.

    • Last ITCL: November 5, 2010
    • Cycle Duration: 22 weeks
    • Cycle Translation: Left (bearish)
    • Next ITCL Window: Now through April 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 rebound and weekly close above congestion resistance near 76.40 would predict a move up toward congestion resistance in the 78 area.
    • Bearish Scenario: A close well below strong congestion support at the 75 level would reconfirm the long-term downtrend and forecast a move down to previous secular bear market lows near 72.

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

    The European Euro Index

    Technical Analysis

    The index closed sharply higher this week, moving up to a new high for the uptrend from June 2010 and breaking above congestion resistance in the 143 area. Technical indicators remain bullish overall, strongly supporting a continuation of the advance.

    Intermediate-term Outlook

    • Bullish Scenario: A weekly close above current levels would reconfirm the uptrend from June 2010 and forecast additional gains.
    • Bearish Scenario: A reversal and close below congestion support near 139.50 would predict a move down to congestion support at the 135 level.

    The bullish scenario is more likely (~70% probable).

    The Japanese Yen Index

    Technical Analysis

    The index closed moderately lower this week, breaking below congestion support in the 119 area. Technical indicators are now moderately bearish overall, supporting a continuation of the downtrend from November 2010.

    Intermediate-term Outlook

    • Bullish Scenario: A rebound and weekly close above downtrend resistance near 122 would predict a return to the previous long-term high at 124.40.
    • Bearish Scenario: A close below current levels would confirm the break below congestion support in the 119 area and forecast additional losses.

    The bearish scenario is more likely (~70% 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

    Technical Analysis

    Gold closed sharply higher this week, moving up to a new all-time high for the secular bull market. Technical indicators are now bullish overall, strongly supporting a continuation of the long-term uptrend.

    Cycle Analysis

    We are 10 weeks into the cycle following the Intermediate-Term Cycle Low (ITCL) that occurred during the week ending January 28. The breakout to new all-time highs this week has cleared the cycle high setup that formed last week. The sharp move higher also reconfirms right translation and forecasts additional gains during the next 4 to 8 weeks. The window during which the next ITCL is likely to occur is from May 20 to July 8, with our best estimate being in the June 10 to July 8 range.

    • Last ITCL: January 28, 2011
    • Cycle Duration: 10 weeks
    • Cycle Translation: Right (bullish)
    • Next ITCL Window: May 20 to July 8; best estimate in the June 10 to July 8 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 long-term uptrend and forecast additional gains.
    • Bearish Scenario: A reversal and close below new congestion support in the $1,410 area would predict a move down to long-term uptrend support near $1,365.

    The bullish scenario is more likely (~70% probable).

    The Gold Currency Index

    Technical Analysis

    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 sharply higher this week, moving up to a new all-time high for the secular bull market. A slight negative divergence remains between momentum and price action, resulting in a slightly bullish condition overall that tentatively supports a continuation of the advance.

    Intermediate-term Outlook

    • Bullish Scenario: A weekly close well above current levels would confirm the long-term breakout and forecast additional gains.
    • Bearish Scenario: A close below uptrend support near 34.05 would predict a move down to congestion support in the 32.50 area and suggest the development of a more substantial correction or extended period of consolidation.

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

    The Gold Miners Index

    Technical Analysis

    The index closed sharply higher this week, moving up to a new all-time high for the secular bull market. Technical indicators are now moderately bullish overall, supporting a continuation of the advance.

    Intermediate-term Outlook

    • Bullish Scenario: A weekly close well above current levels would confirm the long-term breakout and forecast additional gains.
    • Bearish Scenario: A close below long-term uptrend support near 1,595 would predict a return to congestion support in the 1,500 area.

    The bullish scenario is more likely (~70% 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.

    Oil

    Technical Analysis

    Oil closed sharply higher this week, moving up to a new long-term high for the uptrend from early 2009. Technical indicators are now bullish overall, strongly supporting a continuation of the advance.

    Cycle Analysis

    We are 7 weeks into the cycle following the Intermediate-Term Cycle Low (ITCL) that occurred during the week ending February 18. The move up to a new long-term high this week reconfirms right translation and forecasts additional gains. The window during which the next ITCL is likely to occur is from June 3 to October 21, with our best estimate being in the August 5 to September 2 range.

    • Last ITCL: February 18, 2011
    • Cycle Duration: 7 weeks
    • Cycle Translation: Right (bullish)
    • Next ITCL Window: June 3 to October 21; best estimate in the August 5 to September 2 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 long-term uptrend from early 2009 and forecast additional gains.
    • Bearish Scenario: A reversal and close below power uptrend support at $109 would predict a return to congestion support in the $100 area.

    The bullish scenario is more likely (~70% probable).

    The Continuous Commodity Index

    Technical Analysis

    The index closed moderately higher this week, moving up toward recent highs of the long-term uptrend. The uptrend has been rising at an unsustainable rate since late 2010, so it will almost certainly be followed by a violent overbought correction. Technical indicators are slightly bullish overall, tentatively supporting a continuation of the advance.

    Intermediate-term Outlook

    • Bullish Scenario: A weekly close well above the recent high near 685 would reconfirm the long-term uptrend and forecast additional gains.
    • Bearish Scenario: A close below uptrend support near 665 would signal the likely start of a potentially violent overbought correction.
    The bullish scenario is slightly more likely (~60% probable). 
    Stocks: SPY, YINN, IEF, TLH, UUP, ULE, YCL, GLD, SGOL, GDX, UCO, GCC
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