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June 07, 2009

Squawk Box Europe
by Bill McLaren

LET'S LOOK AT THE S&P 500 INDEX - DAILY CHART

Two weeks ago I indicated the index was going up into the 90 day time window and could be an important high or even a top. Please understand the trend remains in a strong position holding above swing highs and since the last low the sell offs have only been one day. So looking to short this market will be very high risk without some evidence but I do have a time window for the next three trading days that could be very difficult resistance. Price resistance is maximum 1012, then 995 and 963. A move above Tuesday's high seems likely and a break of the low of the high day would be the first indication a high could be in place.

LET'S LOOK AT THE 30 YEAR US T-BOND

This is the Feds worst nightmare. Rates are rapidly rising. Normally this would occur if the economy were improving. Unfortunately bonds could be falling due to the government policies and not economic demand -- we don't know. The Fed cannot control long rates-they have tried in the past a failed. So Bonds could ruin the part and should be watched. Best date I have to end the move down is around June 16th but that is not a high confidence cycle but is still a 60% probability. Could be still in a capitulation move down. Support marginally below 113 then 108.

LET'S LOOK AT THE US DOLLAR INDEX -- DAILY CHART

Two weeks ago I said the US DOLLAR was in a panic move down and would not rally past 4 days until the panic was complete. I indicated the important dates were June 2nd (the current low) and June 8th. The 8th is Monday and could be another counter trend high if the index goes up into that date and would indicate the panic style of trend will continue. IF it moves up past Monday then the 2nd could be a low of some significance. If Monday is a high then June 20th and July 8th could be vibrations in "time" and the end of the cycle and possible end of the trend will be July 26th. If the Dollar is going down into that end of July date there will be one rally of 7 to 12 trading days before 26th. But for now the panic is continuing. This is very important IF Monday is not a counter trend high then a low of some significance is in place. The reason for this is the possibility of a "false break" low versus the December low if it can rally past Monday. If Monday is a high then that "time" factor will be valid.

Bill McLaren
McLaren Report

Disclaimer: This message is for educational purposes only and does not constitute trading advice nor an invitation to buy or sell securities. The views are the personal views of the author. Before acting on any of the ideas expressed, the reader should seek professional advice to determine the suitability in view of his or her personal circumstances.

Copyright © 2004-2009 Bill McLaren

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