Daily Charts for May 2, 2011
The following commentary was originally published on May 2, 2011.
S&P 500 Index Daily Chart Analyses
The following technical and cycle analyses provide short-term forecasts for the S&P 500 index. For intermediate-term outlooks see the latest weekly review, and for long-term outlooks see the latest big picture update.
The S&P 500 index closed slightly lower today, retreating from recent highs of the cyclical bull market from 2009. Technical indicators remain bullish overall, strongly supporting a continuation of the advance.
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We are 32 trading days into the cycle following the Short-Term Cycle Low (STCL) on March 16. The Beta High (BH) will likely form sometime during the next 5 sessions, if it has not already occurred today. The window during which the next STCL is likely to occur is now through May 17, with our best estimate being in the May 10 to May 16 range.
- Last STCL: March 16, 2011
- Cycle Duration: 32 trading days
- Cycle Translation: Right (bullish)
- Next STCL Window: Now through May 17; best estimate in the May 10 to May 16 range.
- Setup Status: No active setups.
- Trigger Status: No pending triggers.
- Signal Status: No active signals.
- Stop Level: None active.
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Short-term Outlook
- Bullish Scenario: A close above the recent high near 1,364 would reconfirm the long-term uptrend and forecast additional gains.
- Bearish Scenario: A reversal and close below uptrend support near 1,326 would predict a return to congestion support in the 1,300 area.
The bullish scenario is slightly more likely (~60% probable).
10-year Treasury Note Yield Daily Chart Analyses
The following technical and cycle analyses provide short-term forecasts for the 10-year Treasury note yield. For intermediate-term outlooks see the latest weekly review, and for long-term outlooks see the latest big picture update.
Yields closed slightly lower again today, moving down to a new short-term low slightly below strong congestion support in the 3.30% area. Yields have been effectively trendless since December 2010 and a confirmed breakout or breakdown from this sideways consolidation formation will likely signal the direction of the next meaningful move. Technical indicators remain moderately bearish overall, supporting a continuation of the decline from early April.
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We are 15 trading days into the cycle following the Short-Term Cycle High (STCH) on April 8. The Alpha Low (AL) is imminent and could form at any time. The window during which the next STCH is likely to occur is now through May 23, with our best estimate being in the May 10 to May 16 range.
- Last STCH: April 8, 2011
- Cycle Duration: 15 trading days
- Cycle Translation: Left (bearish)
- Next STCH Window: Now through May 23; best estimate in the May 10 to May 16 range.
- Setup Status: No active setups.
- Trigger Status: No pending triggers.
- Signal Status: No active signals.
- Stop Level: None active.
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Short-term Outlook
- Bullish Scenario: A rebound and close above congestion resistance in the 3.50% area would predict a return to the recent short-term high near 3.60%.
- Bearish Scenario: A close well below current levels would confirm the break below congestion support in the 3.30% area and forecast additional losses.
The bearish scenario is more likely (~70% probable).
US Dollar Index Daily Chart Analyses
The following technical and cycle analyses provide short-term forecasts for the US dollar index. For intermediate-term outlooks see the latest weekly review, and for long-term outlooks see the latest big picture update.
The index closed near unchanged today, holding at recent lows of the downtrend from January. Technical indicators are moderately bearish overall, supporting a continuation of the decline. However, the downtrend from January has been falling at an unsustainable rate and the hesitation exhibited by price behavior during the past 2 sessions suggests that at least a short-term bottom may be forming.
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We are 11 trading days into the cycle following the Short-Term Cycle Low (STCL) on April 15. The Beta Low (BL) is imminent and may have formed today, although we would need to see renewed strength during the next few sessions to confirm that development. Both price oscillators have now experienced bullish crossovers, generating a cycle low setup. A close well above 73.10 tomorrow would generate a confirmed cycle low signal. The window during which the next STCL is likely to occur is from May 12 to May 26, with our best estimate being in the May 16 to May 20 range.
- Last STCL: April 15, 2011
- Cycle Duration: 11 trading days
- Cycle Translation: Left (bearish)
- Next STCL Window: May 12 to May 26; best estimate in the May 16 to May 20 range.
- Setup Status: Cycle low setup occurred today.
- Trigger Status: Cycle low trigger is pending from today and requires a close above 73.10 to generate a cycle low signal.
- Signal Status: No active signals.
- Stop Level: None active.
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Short-term Outlook
- Bullish Scenario: A rebound and close well above power downtrend resistance at 73.10 would predict a quick move up to downtrend resistance near 74.30.
- Bearish Scenario: A close well below current levels would reconfirm the downtrend from early January and forecast additional losses.
The bullish scenario is slightly more likely (~60% probable).
Gold Daily Chart Analyses
The following technical and cycle analyses provide short-term forecasts for the gold market. For intermediate-term outlooks see the latest weekly review, and for long-term outlooks see the latest big picture update.
Gold closed sharply lower today, retreating from recent all-time highs of the secular bull market. Technical indicators are bullish overall, strongly supporting a continuation of the advance. However, the rally from January has been rising at an unsustainable rate and it will likely be followed by a violent overbought correction.
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We are 13 trading days into the cycle following the Short-Term Cycle Low (STCL) on April 12. Today's sharp intrasession reversal indicates that the Beta High (BH) likely formed today. The window during which the next STCL is likely to occur is now through May 11, with our best estimate being in the May 3 to May 9 range.
- Last STCL: April 12, 2011
- Cycle Duration: 13 trading day
- Cycle Translation: Right (bullish)
- Next STCL Window: Now through May 11; best estimate in the May 3 to May 9 range.
- Setup Status: No active setups.
- Trigger Status: No pending triggers.
- Signal Status: No active signals.
- Stop Level: None active.
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Short-term Outlook
- Bullish Scenario: A close above the recent high near $1,564 would reconfirm the long-term uptrend and forecast additional gains.
- Bearish Scenario: A close below power uptrend support near $1,528 would predict a quick return to uptrend support at $1,485.
Both scenarios are equally likely at the moment.
Gold Currency Index Daily Chart Analysis
The Gold Currency Index (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 moderately lower today, retreating from all-time highs of the secular bull market. Technical indicators are moderately bullish overall, supporting a continuation of the advance.
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Short-term Outlook
- Bullish Scenario: A close above the recent all-time high near 36.90 would reconfirm the long-term uptrend and forecast additional gains.
- Bearish Scenario: A close below uptrend support near 35.50 would signal the likely start of a correction and predict a return to congestion support in the 34 area.
The bullish scenario is slightly more likely (~60% probable).
Oil Daily Chart Analyses
The following technical and cycle analyses provide short-term forecasts for the oil market. For intermediate-term outlooks see the latest weekly review, and for long-term outlooks see the latest big picture update.
Oil closed slightly lower today, holding near recent long-term highs of the cyclical uptrend. Technical indicators remain moderately bullish overall, supporting a continuation of the advance.
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We are 13 trading days into the cycle following the Short-Term Cycle Low (STCL) on April 12. The Beta High (BH) will likely form sometime during the next 3 sessions, if it has not already occurred today. The window during which the next STCL is likely to occur is now through May 16, with our best estimate being in the May 6 to May 12 range.
- Last STCL: April 12, 2011
- Cycle Duration: 13 trading days
- Cycle Translation: Right (bullish)
- Next STCL Window: Now through May 16; best estimate in the May 6 to May 12 range.
- Setup Status: No active setups.
- Trigger Status: No pending triggers.
- Signal Status: No active signals.
- Stop Level: None active.
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Short-term Outlook
- Bullish Scenario: A close well above current levels would reconfirm the long-term uptrend and forecast additional gains.
- Bearish Scenario: A reversal and close below uptrend support near $110 would predict a return to congestion support in the $105 area.
Both scenarios are equally likely at the moment.
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