Stocks, Bonds, USD, Gold - key intermediate term scenarios to watch
SP500 breached its January crash low in February but quickly and meaningfully rebounded. It is important to note that Dow30 and MidCap-SP400 did not suffer a lower low. Thus, the decline from the November high either ended or is missing a fifth wave decline (Chart S1).
[Bullish, Chart S2] Wave -down from the nominal high completes at levels around the Feb low.
[Bearish, Chart S3] Wave -down began in Q3 of 2014, tracing out a flat-light structure. wave (c)-down of the flat is a contracting or expanding EDT-like structure. This potential EDT is still missing wave d-up and e-down, with a final target potentially between 1650 and 1750.
The 10Y Treasury Yield completed the right shoulder of a head-and-shoulders pattern (Chart B1). The market is at a critical juncture right now. A fulfilled H&S patterns would likely mean current speculation of negative nominal interest rates has much merit, whereas a failed H&S would suggest a meaningfully higher interest rate environment is in sight.
If the USD index has not topped (Chart $1-green), its year-long consolidation may not be complete (Chart $2-blue, red).
The smart rise in Gold prices from the 2015-Q4 low strongly suggests that the entire decline (or the first major part of the decline) from the 2011 may be over following the completion of a contracting EDT (Chart G1-blue).
However, wave [e] of the proposed contracting EDT is either very compressed or uncharacteristically short (and lacks the final up-and-down subdivision).
This introduces another possibility that the rebound in Gold is only wave [d]-up of an expanding EDT (Chart G1-red). A higher high would eliminate this possibility.