LET’S LOOK AT THE S&P 500 INDEX DAILY CHART

Last interview I indicated the rally may have exhausted into the 60 day cycle.  If that were the case the Key to this strong advance was the number of days and the number of points to the decline.  I indicated if the index exceeded 3 days down it could indicate the uptrend was complete and a downtrend of some sort would take place.  The critical support is 875 and that has still held but the index traded down 5 days.  Although that 5^th day down was just marginally lower.  It has rallied three days and remember the normal counter trend within a trend is 1 to 4 days and this rally failed at 3 days so there could be a lower high in place and the start of a downtrend.  The support below 875 is 863 and very important 831 down to 826.  The 863 support is ¼ of the range up and keeps the uptrend intact so for the bears that is a very important level to be broken.

The next important time window is 90 calendar days from low around the 5^th of June. If the index doesn’t get any legs down it is very likely the index would move sideways into that time window and bring in an important high after a 30 day period of distribution.  If the index doesn’t trend down from here but moves on the side into the first week in June that could be the end of the move up and with 30 days of distribution would represent a very bearish picture.      

NOW LET’S LOOK AT THE US DOLLAR INDEX MONTHLY CHART

The index rallied up from the “false break” low and moved to our forecasted price level of between 1/3 and 3/8 of the last range down.  This level keeps the downtrend intact.  I noted a year ago that countries would attempt to debase their currencies in an attempt to gain a competitive advantage to revive their economies.  The key support on the monthly chart is the 2004 low.  The large amount of volatility the previous 6 months is an indication of a top so there could be a test of the 2008 low or a marginal new low.

NOW LET’S LOOK AT THE DAILY CHART

The index is now in a capitulation style of trend or panic style of downtrend.  This is clear due to the “space” that occurred between the 3 day rally high and the previous low.   The key support is not only the price of the December 2008 low but is also the price of the December 2004 low.  There is a very strong time cycle present that indicates the follow dates can produce a strong vibration in “time.”  The next is June 2^nd and June 8^th – the 8^th is very significant at 96 days from high.  Then June 20, July 8 and the expiration of the cycle on July 26.      

Disclaimer: All the reports and content in the entire McLaren Report web site (including this report) are for educational purposes only and do 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.