1. June 2011 Technical Market Outlook
Peter Lee – Chief Technical Strategist
Wealth Management Research
* Charts courtesy of Reuters Bridge and Bloomberg as of 9 June 2011 unless indicated otherwise.
This report has been prepared by UBS Financial Services Inc. (“UBS FS”).

2. Major Technical Trends – SPX Index
 Secular Trend (8-20 years) – Past the middle of a long-term sideways trading range market
March 2009 is the mid-point of a long-term secular trading range market that began on March 2000. Another 5-10 years of
sideways trading is necessary before the start of the next secular bull market in the US. SPX will likely be confined to a
choppy trading range as defined by 800 +/- 50 on the downside and 1,500 +/- 50 on the upside. The statistical mid-point of
this secular trading range or the equilibrium level/fair value remains 1,120-1,160.
 Primary Trend (1-3 years) – Entering into the back half of a Cyclical Recovery/Cyclical Bull Rally
March 2011 marks the 2nd anniversary of the Mid-term Election Year cycle low. This suggests the easy part of the rally is
behind us. Although the current US business cycle recovery can still sustain further it will be at a more subdued pace. This
implies the US stock market bull cycle rally will begin to mature during the 2nd half of the year into 2012 leading to a more
selective market - “stock picker’s market environment”. Historically, US stock market tends to be favorable during the
3rd and 4th year of a US Presidential cycle but tends to be challenging during the first 2-years (2013-2014).
 Intermediate Trend (3-12 months) – Prices can grind higher but recovery begins to mature
Our initial 2011 projection of 1,348-1,362 has been achieved during the 1st Quarter 2011. However, there may be one final
rally left possibly towards 1,440-1,450 before a deeper and more extensive correction of the magnitude of 10-15% or more
occurs during the 2nd half of the year.
 Short-term Trend (1 week-3 months) – Correction ending and the start of another technical rally
The May correction of 6.75% is now moving into the latter stage of its decline. Another 2-4% decline will bring SPX to key
intermediate-term support near 1,220-1,250. The ability to find support here coupled with an oversold condition may
promptly lead to another technical rally. The integrity of this next rally will help to determine the extent/maturity of the
March 2009 cyclical bull rally.
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3. Psychology of the 2007-2009 Bear Market
 Psychology of a Bear Market often coincides with the 5 Stages Grief
Elisabeth Kubler-Ross, MD 1969 book – On Death and Dying
– Stage 1 – Denial – Early 2007 (i.e., HSBC and Barclays Bank were the first global banks to report sub-prime write downs)
– Stage 2 – Anger – 2nd Quarter to 3rd Quarter 2007 (i.e., 2 Bear Stearns Hedge Funds collapsed & sharp losses from
Goldman Sachs – Quant Fund)
– Stage 3 – Bargaining/Negotiation – End of 2007 to 1st half of 2008 (i.e., FED Easing, initiation of the TARP bailout plan)
– Stage 4 – Depression – (i.e., week of Sept 15 2008 – Lehman Brothers bankruptcy, Merrill Lynch sold to BAC, and AIG
bailout) – Institutional investors capitulated
– Stage 5 – Acceptance (i.e., Jan 2009 to March 2009) – Market Capitulation – Selling Climax phase – Retail investors
finally capitulated
 March 2009 Cyclical Bull trend will sustain further but will likely mature latter in the
year and begin to peak during the next Presidential Election Year (2012)
 Cyclical Bull rallies in the past tend to sustain for 1 to 3 years with an average duration of approximately 2-years. The most
recent cyclical bull rally from October 2002 to October 2007 was one the longest cyclical bull ever recorded sustaining for 5
years. If the March 2009 cyclical bull rally follows the path of a normal cyclical recovery then it is reasonable to expect this
current cyclical recovery can extend into 2011 and possibly 2012 coinciding with the favorable market conditions associated
with the 3rd and 4th year of a US Pre-election Year Cycle . Nonetheless, investors/traders need to understand a cyclical bull
rally unlike that of a secular or structural bull trend will eventually come to an end. US equities appear most vulnerable for a
cyclical bear decline as the first two years of a US Presidential Election Year cycle tend to be challenging.
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4. Psychology of the Market – Fear, Greed and Hope
Greed/Euphoria – 2nd half 2007
Anxiety
Thrill
Denial
2nd Half 2011
Excitement and into 2012
Fear
Optimism Optimism
Desperation – 2nd half 2008
Are we
here?
Panic
Relief
Capitulation
Hope
Despondency
Depression – 1st Qtr 2009
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5. SPX Index – Secular Trends from 1900 to Present
10,000
Secular Bear
Trading
Range
1,000
Secular Bear
Trading
Range
Secular Bear
100 Trading
Secular Bull
Secular Bear Range
1982-2000
Trading
Range
For the past 200+ years, SPX has consistently
10 alternated between periods of long-term
Secular Bull bullishness via secular bull trends and
Secular Bull 1949-1965 periods of long-term bearishness via secular
1921-1929 bear/trading range trends without ever
missing a single cycle.
1
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2009
Our Brave New World – Secular Trading Range Market Environment study (published on August 2002) offer supporting evidences to suggest that since
1800, the US stock market have sustained 14 distinct long-term secular trends – 7 of which were secular bull markets and 7 were secular bear/trading
range markets. The 7 secular bulls were: 1982-2000, 1949-1966, 1921-1929, 1896-1906, 1861-1881, 1843-1853, and 1815-1835. The 7 secular bear or
trading range markets were: 1966-1982, 1929-1949, 1906-1921, 1881-1896, 1853-1861, 1835-1843 and 1802-1815. The longest sustained for 20 years and
the shortest endured for 8 years. It is uncanny the US stock market has consistently cycled from one long-term secular trend to the next without missing
a beat. This prompts us to conclude SPX is an efficient market that self corrects or mean reverts whenever it becomes extremely extended in either
direction. Contrary to popular opinions, the average durations of these previous secular bull and secular bear/trading range trends were strikingly
similar. That is, the average duration for 7 prior secular bulls was 14.7 years and for the 7 secular bear/trading range markets it was 13.6 years. It
remains our contention that March 2000 marked the start of the 8th secular trading range trend which we believe can extend until 2015-2020.
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6. SPX Index – Long-Term Secular Trend (Monthly Log Chart)
__
1942 Uptrend = 665
__ 1932 Uptrend = 425
The bears continue to favor the 1932 uptrend suggesting an eventual retest of the red uptrend line now rising near 425. We, on the other hand, favor the 1942 uptrend
or the white uptrend now trending up near 665. Why? We believe the white uptrend is the dominant trend since an uptrend becomes stronger with each successful
tests. 1942 uptrend recorded 4 successful tests as compared to 2 successful tests for the 1932 uptrend. Since time is required to heal the pain from the previous bubble
bursts (i.e., Tech/Telecom, Real Estate, Credit, and Financial) we expect an extended sideways trading range will allow the 1942 secular uptrend (white line) to catch up to
price chart thereby resetting the market back to a new equilibrium level. Mathematically, both uptrend lines cannot flatten or turn down, at least not in our lifetime. By
extrapolating the 1942 uptrend (white line) over the next few years this line converges near 800 +/- 50 establishing a potential floor on the next cyclical bear decline. We
suspect SPX may be most vulnerable for the next cyclical bear decline during the first 2-years of a US Presidential Election. Will the next cyclical bear decline promptly
begin during late 2012 into 2013 and culminate with yet another major Mid-term Election Year cycle low during 2014 timeframe?
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7. Similarities – DJIA 1966 to 1982 and SPX 1997 to Present
1966 - 1982 1997 - Present
Death Cross
Sell signal
Midpoint =
820-830 Midpoint =
1,120-1,160
Golden
Cross Buy
signal
8 years to form Another 8 years
left shoulders to form right
shoulders 10 years to form left shoulders
Head and Shoulders Bottom??
16-year Head and Shoulders Bottom Another 5-10 years to form right shoulders?
Although we recognize no two markets are identical it remains uncanny the 1966-1982 secular bear/trading range market resembles closely the current 1997-present market
environment. The1974 bottom marked the mid-point of the 1966-1982 secular trading range market. DJIA would trade sideways for another 8 years establishing the
necessary base (right shoulders) to sustain the next major structural bull market (1982-2000). If SPX has indeed achieved a major bottom (Head formation) during the March
2009 downturn does this imply another 5-10 years of sideways trading is necessary to also establish the right shoulders before the start of the next structural bull market?
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8. SPX Index – Positive/Negative Outside Months
Positive Outside Months  Bullish
Negative Outside Months  Bearish Negative
Monthly Death Cross Sell Outside Months
Negative Outside April 2001 and July 2008 = Feb/Jul 2007
Months = Jan, Jul,
and Sep 2000 Negative Outside Months =
Mar 04/Mar 05/May 06
Negative Outside
Oct 1999 Month = Jan 2010
Positive Outside Months =
Oct 04/Jul 05/Jan 06
Monthly Golden Cross Buy
Positive Outside on Jan 2004/June 2010
Month = Emerging
Negative Outside
Market Crisis – Oct 98
Month = Jan 2009
Positive Outside Month = Positive Outside Month = Real
10-month ma = 1,270 Tech/Telecom Bubble – Mar 03 Estate, Credit, Deleveraging and
30-month ma = 1,096
Global Financial Crisis – Jul 09
Positive and negative outside reversal months have been reliable alerting us to extreme market conditions associated with previous market tops and bottoms. These
monthly reversal patterns have been especially accurate during recent extreme price peaks and bottoms. For instance, negative outside months that developed during
2000 and 2007 both preceded major bear market declines. Conversely, positive outside months during 1998, 2003 and recently 2009 led to strong bull rallies. Despite an
increased in uncertainties over the sustainability of 2-year old cyclical there has been only one other negative outside month pattern during January 2010.
7

9. Statistics on 4-Year Mid-term Election, 10-year Decennial Year,
Jan Barometer and Pre-Election Year Cycles
Mid-term SPX Yearly Intra-Year Jan SPX Year Down Jan Jan CloselowMarket Mid-term DJIA Pre- DJIA Gains
Election Returns Corrections 1953 -6.6% -0.7% -13.9% Bear Election low Election Yr Hi low-hi / Year
1930 -28.5% -44.3% 1956 2.6% -3.6% 0.9% Flat
1934 -4.7% -29.3% Jul 1914 Dec 1915 89.6% / 87.1%
1957 -14.3% -4.2% -12.8% Bear
1938 24.6% -28.9% Jan 1918 Nov 1919 63.0% / 30.5%
1960 -3.0% -7.1% -6.0% Bear Jan 1922 Mar 1923 34.1% / -3.3%
1942 12.4% -17.8% 1962 -11.8% -3.8% -24.0% Bear Mar1926 Dec 1927 49.7% / 28.8%
1946 -11.9% -26.7% 1968 7.7% -4.4% -4.9% Cont. Bear Dec 1930 Feb 1931 23.4% / -52.7%
1950 21.7% -14.0% Jul 1934 Nov 1935 73.6% / 38.5%
1969 -11.4% -0.8% -13.4% Bear
1954 45.0% -4.4% Mar 1938 Sep 1939 57.6% / -2.9%
1970 0.1% -7.6% -18.6% Cont. Bear
1958 38.1% -4.4% Apr 1942 Jul 1943 56.9% / 13.8%
1973 -17.4% -1.7% -20.6% Bear
1962 -11.8% -26.9% Oct1946 Jul 1947 14.5% / 2.2%
1974 -29.7% -1.0% -35.5% Bear
1966 -13.1% -22.2% Jan 1950 Sep 1951 40.4% / 14.4%
1977 -11.5% -5.1% -11.1% Bear Jan 1954 Dec 1955 74.5% / 20.8%
1970 0.1% -25.9%
1978 1.1% -6.2% -2.6% Cont. Bear Feb 1958 Dec 1959 55.5% / 16.4%
1974 -29.7% -37.6%
1978 1.1% -13.6% 1981 -9.7% -4.6% -13.0% Bear Jun 1962 Dec 1963 43.2% / 17.0%
1982 14.8% -1.8% -14.9% Cont. Bear Oct 1966 Sep 1967 26.7% / 15.2%
1982 14.8% -16.6%
1984 1.4% -0.9% -9.5% Flat May 1970 Apr 1971 50.6% / 6.1%
1986 14.6% -9.4%
Dec 1974 Jul 1975 52.7% / 38.3%
1990 -6.6% -19.9% 1990 -6.6% -6.9% -10.2% Bear
Feb 1978 Oct 1979 21.0% / 4.2%
1994 -1.5% -8.9% 1992 4.5% -2.0% -3.5% Flat
Aug 1982 Nov 1983 65.7% / 20.3%
1998 26.7% -19.3% 2000 -10.1% -5.1% -9.3% Bear Jan 1986 Aug 1987 81.2% / 2.3%
2002 -23.4% -33.8% 2002 -23.4% -1.6% -31.3% Bear Oct 1990 Dec 1991 34.0% / 20.3%
2006 13.6% -7.7% 2003 26.4% -2.7% -6.4% Cont. Bear Apr 1994 Dec 1995 45.2%/ 33.5%
2010 12.8% -17.1% 2005 3.0% -2.5% -3.7% Flat Aug 1998 Dec 1999 52.5% / 25.2%
Avg. (21) 4.5%(ex div) -20.4% 2008 -38.5% -6.1% -46.3% Bear Oct 2002 Dec 2003 43.5% / 25.3%
Jan 2006 Oct 2007 33.18% / 24.4%
2009 23.46% -9.4% -28.6% Cont. Bear
Jul 2010 ??? 2011 ??? / ???
Decennial SPX Yearly Intra-Year 2010 12.8% -3.7% -5.87% Cont. Bear
Year (0) Returns Corrections Avg(24) -4.0% -3.9% -14.4% Avg. (24)
1930 -28.5% -44.3% May Sep(15.5 mo) 49.3% / 17.7%
1940 -15.1% -29.6% 24 Down Januarys  13 SPX down Yrs and 11 up Yrs
1950 21.7% -14.0% Highest frequencies of Mid-term lows:
1960 -3.0% -11.5% Jan (6) and Oct (4)
1970 0.1% -25.9%
1980 25.8% -17.1% Highest frequencies of Pre-election highs:
1990 -6.6% -19.9% Dec (9) and Jul/Sep/Nov (3 each)
2000 -10.1% -17.2%
2010 12.8% -17.1%
Avg. (9) -0.32% -21.8%
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10. S&P 500 Index Statistics - Mid-term to Pre-Election Year, Sept
& Oct Mid-term Returns and Frequencies of Bottoms
Mid-term Election Years Only Mid-term % Mid-term % Mid-Term % of
Following Septembers Change Octobers Change Low / Month Occurrences Total
Mid-term Intra-Day Year's % January 5 26.32%
Elections Low Close Change 1950 (Bull); 1954 (Bull); 1958 (Bull); 1986 (Bull); 1998 (Bull)
9/30/1934 -0.50% 10/31/1934 -3.20%
1934 8.36 13.43 61%
9/30/1938 1.50% 10/31/1938 7.60% October 5 26.32%
1938 8.5 12.46 47%
9/30/1942 2.70% 10/31/1942 5.80%
1946 (Bear); 1966 (Bear); 1974 (Bear); 1990 (Bull); 2002
1942 7.47 11.67 56% (Bear)
1946 14.12 15.3 8% 9/30/1946 -10.20% 10/31/1946 -0.80%
April 2 10.53%
1950 16.66 23.69 42% 9/30/1950 5.60% 10/31/1950 0.40%
1942 (Bear; 1994 (Bull)
1954 24.8 45.48 83% 9/30/1954 8.30% 10/31/1954 -1.90%
March 2 10.53%
1958 40.33 59.89 48% 9/30/1958 4.80% 10/31/1958 2.50%
1938 (Bear); 1978
1962 52.32 75.02 43% 9/30/1962 -4.80% 10/31/1962 0.40% (Bear)
1966 73.2 96.47 32% 9/30/1966 -0.70% 10/31/1966 4.80% June 2 10.53%
1970 69.29 102.09 47% 9/30/1970 3.30% 10/31/1970 -1.10% 1962 (Bull); 2006 (Bear)
1974 62.28 90.19 45% 9/30/1974 -11.90% 10/31/1974 16.30% August 1 5.27%
1978 86.9 107.84 24% 9/30/1978 -0.70% 10/31/1978 -9.20%
1982 102.2 164.93 61% 1982 (Bear)
9/30/1982 0.80% 10/31/1982 11.00%
1986 202.6 247.08 22% July 1 5.27%
9/30/1986 -8.50% 10/31/1986 5.50%
1990 294.51 417.09 42% 1934 (Bear)
9/30/1990 -5.10% 10/31/1990 -0.70%
1994 435.86 615.93 41% May 1 5.27%
9/30/1994 -2.70% 10/31/1994 2.10%
1998 912.83 1469.25 61% 1970 (Bear)
9/30/1998 6.20% 10/31/1998 8.00%
2002 768.63 1111.92 45% December 0 0.00%
9/30/2002 -11.00% 10/31/2002 8.60%
2006 1219.29 1478.49 21% February 0 0.00%
9/30/2006 2.50% 10/31/2006 3.20%
Mid-term Years AVERAGE: 43.7%
9/30/2010 8.80% 10/31/2010 November 0 0.00%
September 0 0.00%
All Years -1928-2008 AVERAGE: 28.99%
All periods: -0.58% 3.12% 19 100%
% of years S&P decreased: 15%
Positive Sept: 4.45% Pos Sept&Oct: 3.94%
All Years ex-Mid-term AVERAGE: 24.50% No Occurrences
Sept 2010 = 8.76% Oct 2010 = 3.69%
% of years S&P decreased: 19.00% towards the
Applying 43.7% to SPX 2010 mid-term low of
end of the year
1,010.91 suggests upside to 1,453 by 2011
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11. SPX Seasonality Study – Monthly Returns from 1929-2010
Yearly %
Tim e Period Duration Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov* Dec* Returns
All 1.18 -0.26 0.41 1.13 -0.07 0.60 1.37 0.74 -1.14 0.34 0.30 1.42 6.02
1929-2010 Mkt 81 years 2.71 2.90
0.45 0.48
Bear
1929-1949 Mkt 21 years 1.85 -0.28 -1.88 0.43 -1.06 3.23 3.09 2.66 -3.01 -0.81 -2.61 0.77 2.39
8.99 0.01
Bull
1949-1966 Mkt 18 years 1.06 -0.42 1.16 1.20 -0.28 -0.40 2.93 -0.50 -0.20 0.97 2.27 2.17 9.98
2.03 5.51
0.20 0.55
Bear
1966-1982 Mkt 17 years 0.88 -0.79 0.73 1.28 -1.44 0.06 -0.25 0.24 -0.36 1.17 1.29 0.84 3.64
0.06 3.00
0.02 0.82
Bull
1982-2000 Mkt 19 years 2.30 0.96 1.45 1.33 1.35 1.19 0.55 0.78 -0.35 0.78 0.99 2.39 13.71
2.52 5.68
0.18 0.41
Bear
2000-2010 Mkt 10 years -1.92 -2.33 1.83 2.19 0.46 -1.83 0.16 0.39 -1.35 0.41 0.88 0.63 -0.49
-1.28 -0.41
Secular Bear/Trading Markets (3) 0.27 -1.13 0.23 1.30 -0.68 0.49 1.00 1.10 -1.57 0.26 -0.15 0.75 1.85
Average returns for three m onths 2.58 0.87
(Jun, Jul & Aug vs. Nov, Dec & Jan)
Secular Bull/Trading Markets (2) 1.68 0.27 1.31 1.27 0.54 0.40 1.74 0.14 -0.28 0.88 1.63 2.28 11.85
Average returns for three m onths 2.27 5.59
(Jun, Jul & Aug vs. Nov, Dec & Jan) 0.19 0.47
Mid-term election year 0.69 0.14 0.05 0.67 -1.06 -1.24 0.62 -0.64 -1.19 2.59 2.13 1.52 4.28
-1.26 4.34
Pre-election year 3.38 1.20 0.71 2.18 0.16 1.48 0.70 0.74 -0.95 0.24 -1.51 2.48 10.81
2.92 4.36
June tends to be a favorable month
with average returns of 1.48% during Since 2011 is a pre-election year, a 10.81% average yearly * note: Monthly returns for 2010 are not included.
Pre-election years. suggests SPX upside target to 1,394 by the end of the year. Source: Reuters, Bloomberg, and UBS WMR
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12. Possible Scenarios for SPX this Year
Scenario 1 = Wide trading range to develop into the 2nd half of the year and possibly into early 2012
 Probability = 50%
 The strong rally of 106% from the March 2009 low and 36% from July 2010 bottom suggests the easy money has already
been achieved. Although the cyclical bull rally can still trend higher it will likely proceed at a more subdued pace as
investors/traders turn increasingly selective during the 2nd half of the year and into 2012. Wall Street has recently begun to
lower their overly optimistic year end projection for SPX. Nonetheless, street consensus view for the end of year remains near
1,425-1,450. We believe this target is still achievable but must begin as quickly as possible to prevent loss of price
momentum. We expect SPX to be confined to a wide trading range between 1,220-1,250 and 1,440-1,450 into the end of
the year and possibly into early 2012.
Scenario 2 = A retest of July/August 2010 pivotal low at 1,010-1,040 this year and possibly a breakdown next year
 Probability = 20%
 This remains the minority (contrarian) view on the Street but is gaining traction during recent correction. This bearish call is
based primarily on the onset of another tail risk (i.e., European sovereign debt crisis (PIGGS), Lehman 2, May 6th flash crash,
double dip recession, deflation, inflation, oil shock, currency crisis and etc.) escalating into widespread global risk aversion.
Two recent two geopolitical events (Middle East/North Africa and Japan Hurricane/Tsunami/Nuclear) had minimal impact on
global equity markets. However, as these two recent geopolitical events subside global investors may begin to turn to other
geopolitical events such as Sovereign Debt crisis in Portugal, Spain, and etc. To trigger a deeper and prolonged correction
SPX must violate the respective April/March 2011 lows at 1,294.70 and 1,249.05 as well as the 38.2% retracement from July
2010 rally at 1,233.19. It is interesting the 10% correction from May 2011 high (1,370.58) also brings SPX to 1,233.5.
Scenario 3 = Cyclical Bull rally sustains into 2011 and the strong buying turns speculative into the end of year
 Probability = 30%
 This scenario is favored by the bulls. This bullish call is predicated on continued strong inflows (liquidity) into global Equities.
The strong buying continues into the 2nd half of the year and carries over to 2012. The trigger for this buying is associated
with forced short covering and sideline money returning to the marketplace as the March 2009 cyclical bull resumes. The
buying turns speculative as investors chase returns as the market trends higher and higher. SPX achieves our 2011 target of
1,440-1,450 this year and overshoots into the low-1,500’s peaking next year just ahead of 2000/2007 highs at 1,553-1,576.
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13. SPX Index – Longer Term Outlook (1+ year)
How high is high?
Breakout above 1,227  1,443-1,445
May 2008 high = 1,440.24
1st qtr 2011 target  1,348-1,362
76.4% = 1,361.50
61.8% = 1,228.74 2010 target  1,220-1,250
50% = 1,121.44 2009 target  1,121
38.2% = 1,014.14 Nov 2008 high = 1,007.51
Jan-Jul 2009 high = 943-956
Since 1934, from Mid-term
Year low to Pre-election Mar 09 low = 666.79
Year-end has averaged Jul 09 low = 869.32
43.7% gains. If history is July 10 low = 1,010.91
repeated then SPX can rally Aug 10 low = 1,039.70
to a high of 1,453 this year. Nov 10 low = 1,173.00
Mar 11 low = 1,249.05
SPX has recently achieved our initial 2011 projection of 1,348-1,362 earlier in the year. Since then SPX has struggled to followed through with higher prices. Is the recent weakness
indicating a matured cyclical bull rally? Or is this another correction that will set the stage for the resumption of the Mar 2009 cyclical bull rally. Since the primary trends from both the Mar
2009 bottom as well as the Jul 2010 bottom remain up we will respect these prevailing trends. Since we have yet to achieve our optimistic technical projection of 1,440-1,450 we believe
there is further upside before a cyclical peak develops. The mid-1400s projection is based primarily on the following: (1) breakout above 1,227 during late-2010 renders upside targets to
1,443; (2) retest of a prior major reaction high of 1,440 (May 2008); (3) repeat of historical average return of 43.7% from a Mid-term low (1,010.91) to Pre-Election Year end close  1,453;
(4) extension of 2008/2009 uptrend channel (grey lines) converge at 1,440-1,450; and (5) a convincing move above 76.4% retracement at 1,361.50 suggests next target to the mid-,1,400s.
Although we recognize the cyclical bull rally is beginning to mature the current cyclical bull rally will sustain as long as SPX holds onto key intermediate term support at 1,220-1,250. Failure
to maintain support confirms an intermediate-term top and suggests downside risks to 1,120-1,150 or Sept/Oct 2010 key breakout and possibly 1,010-1,045 or pivotal July/Aug 2010 bottoms.
12

14. SPX Index – Intermediate-term Outlook (3-12 months)
Negative Outside weeks
Uptrend Channel from March 2009 still intact. Top of on May/June 2011
Channel  1,470 Bottom of Channel  1,235-1,240
Nov 10 high = 1,227.08 200-day ma = 1,252
Apr 10 high = 1,219.80
23.6% = 1,204.49 Mar 11 low = 1,249.05
Jan/Jun/Jul/Aug 10 highs =1,120-1,150
38.2% = 1,101.73
50% = 1,018.69
61.8% = 935.64 Feb/May/Jul/Aug 10 lows = 1,011-1,045
Jul 09 low =869.32
10-week ma = 1,328
30-week ma = 1,296
Mar09 lows = 666.79
It is interesting to note that despite recent geopolitical, economic and other market turmoil SPX is only down -6.8% or within a normal 5-7% correction. Nonetheless, two
negative outside week patterns during first week in May 2011 and again during the first week in Jun 2011 warn of distribution/selling pressure. This selling is evident as
SPX recently broke below its key near-term support at 1,295. This breakdown signals the potential for a retest of major intermediate-term support at 1,220-1,250 or the
convergences of key technical levels including the pivotal 200-day ma and Dec 2010 breakout and most important, the bottom of Mar 2009 uptrend channel (1,235-1,340).
The ability to maintain this important support can stabilize the recent selling allowing for the resumption of the Mar 2009 cyclical bull trend rendering upside targets to
1,360-1,370 and then into mid-1400s or back to the top of its 2+ year uptrend channel. On the other hand, failure to maintain key support confirms a market top and
opens the door for a deeper and more extensive downturn towards 1,120-1,150 and possibly to 1,010-1,045 under severe selling.
13

15. SPX Index – Intermediate-term Outlook (3-12 months)
Feb-Apr 2011 head/shoulders bottom breakout negated Downside gaps on
 retest key intermediate-term support at 1,220-1,250 May/June 2011
30-day ma = 1,330
50-day ma =1,329
150-day ma = 1,290
150-day ma = 1,290
200-day ma = 1,252
200-day ma = 1,252
Apr 10 high = 1,219.80 Nov 10 high = 1,227.08
38.2% = 1,233
Mar 11 low = 1,249.05
50% = 1,190
Nov/Dec 10 lows = 1,173-1,186
61.8% = 1,148
Jan/Jun/Jul/Aug 10 highs =1,120-1,150
Feb/May/Aug 10 lows =1,040-1,045
Jul 10 lows = 1,010.91
Recent violation of Feb-Apr 2011 head/shoulders bottom formation on a decline below 1,295 corresponding to the left/right shoulders as well as the 150-day ma has
weakened the near-term trend. So does this imply a cyclical peak has been established in the marketplace? Not necessarily, as long as the primary uptrend from Jul/Aug
2010 bottom remains intact. Nonetheless what are the downside risks? The following are key technical supports: intermediate-term support is at 1,220-1,250
corresponding to 200-day ma (1,252), 38.2% retracement from Jul 2010 to May 2011 rally, 38.2% retracement (1,233) from Jul 2010 to May 2011 rally, and 10%
psychological correction from May 2011 peak or 1,233.5 and Dec 2010 breakout (1,227). Additional key support is also available at 1,173-1,190 or the Jul/Aug 2010
uptrend, Nov/Dec 2010 lows, and 50% retracement from Jul 2010 rally. 1,120-1,150 remains investment-term support as this coincides with Sep 2010 breakout, 61.8%
retracement from Jul 2010 rally and projected downside of -121.53 points target to 1,127.5 based on confirmed head/shoulders top neckline breakdown below 1,249.05.
14

16. SPX Index – Shorter-term Outlook (1-3 months)
2 May 2011 = negative outside
day and negative outside week 1-month channel breakdown in low-1,300s suggests a
projected decline of 41-points or target to 1,260.
1 Jun 2011 = negative outside
day and negative outside week
1,337
Apr 2010 correction = -17.1%
Aug 2010 correction = -7.9%
Nov 2010 correction = -4.4%
1,296
Feb 2011 correction = -7.1%
May 2011 correction = -6.8%
Average of 5 corrections  -8.7% or 1,251
Average of 4 corrections ex Apr 2010
correction  -6.6% or 1,280
SPX has broken a well defined 5-week downtrend channel dating back to May 2011 near the low-1,300s. This channel breakdown suggests a decline of 41-points or downside targets to
1,260 or close to key intermediate-term support at 1,220-1,250. Based on current oversold conditions a technical rally is likely. This rally will help to determine whether a cyclical peak has
developed or confirm another normal correction within the context of a continued 2-year cyclical bull trend. In the past 5 SPX corrections have averaged declines of -8.7% suggesting
downside risk for SPX is limited to 1,251. If one considers the Apr-Jul 2010 correction (-17.1%) an outlier the other 4 corrections averaged -6.6% or SPX downside is limited to 1,280.
Nonetheless, the integrity of the rally will help decide the next major directional trend. Historically selling can subside in two ways -- via the exhaustion of sellers and/or the decline creates a
favorable risk/reward profile that entice buyers to return. To reverse the 5-consecutive weeks of selling SPX needs at the minimum to surge above initial supply at 1,296-1,313 coinciding with
recent breakdown and bottom of channel. This will then help to stabilize the selling pressure leading to a rally back to secondary supply at 1,337-1,345 or top of downtrend channel and Jun
2011 peak. Above supply zone may extend rally back to key supply near 1,360-1,370 or the pivotal May 2011 highs. Above 1,370 reaffirms the resumption of the 2-year cyclical bull trend.
15

17. US Dollar Index – Monthly Secular Long-term Trend
Long-term pattern  Head and Shoulders Top
Head = 120-121
Intermediate pattern  Symmetrical Triangle
Left Shoulders
Right Shoulders
Breakout
> 89-92.5
86
Neckline Support = 70-71
Breakdown
Shorter-term range = 72.86– 76-77
below 74.21-75.24
Intermediate range = 70-71 – 81.5-83.5 Top of band = 106  72.86 and then
Long-term range = 59-60 – 89-92.5 Middle of Band = 85 71.05-71.21
Bottom of band = 65 10-month ma = 77
30-month ma = 80
16

18. US Dollar Index – Retracement Study - Intermediate
Jun 2010 high = 88.80
76.4% = 86.05
61.8% = 83.79
50% = 81.96
61.8% = 102.10
Symmetrical Triangle breakdown
50% = 96.17
38.2% = 90.24 Breakout
23.6% = 82.91
May 2006 low = 83.41
10-week ma = 75 Dec 2004 low = 80.48
30-week ma = 77
Breakdown
Apr 2008 low = 71.05
US Dollar Index remains in a long-term secular downtrend as represented by the 20+ year head/shoulders top pattern in the previous page. On an intermediate-term basis
(weekly chart) a symmetrical triangle breakdown below key support at 74.21-75.24 coinciding with the Nov 2009 lows, Nov 2010 bottoms and 2008 uptrend is technically
significant as this suggests a decline to 72.86 or May 2011 bottom. Below this support opens the door for a retest of Mar/Apr 2008 lows at 71.05-71.21. Beyond this low
confirms a structural breakdown and downside targets to 56-57, over time. However, on a near-term basis, an oversold condition may trigger a technical bounce possibly
to initial supply at 75-77 corresponding to the 10-week/30-week ma, Jun 2010 downtrend and extension of 2008 uptrend. Ability to surge above this supply zone signals a
recovery phase to secondary supply at 80.5-83.5. Key intermediate term supply remains at 88.79-88.80 or Mar 2009 highs, June 2010 highs and 2005 downtrend.
17

19. EURO/USD – Intermediate-term Outlook
Downtrend breakout?
50% = 81.96
31.8% = 1.31
50% = 1.21
10-week ma = 1.44
30-week ma = 1.39 Neckline Support = 1.1643-1.1880
61.8% = 1.12
10-mo ma = 1.39
30-mo ma = 1.37
76.4% = 1.01
Head and shoulders top or a long-term basing pattern?
EUR/USD is inversely correlated to the US Dollar Index. The monthly long-term charts sports a large multi-year bullish cup and handle pattern signaling higher prices, over
time. However, the intermediate-term picture shows a potential complex Head/Shoulders top formation as well as a formidable 2+ year downtrend. Neckline support
corresponds to 2004/2005/2010 lows at 1.1643-1.1880. Left shoulder is at 1.3668 or Dec 2004 highs and right shoulder is 1.41-1.4281 corresponding to 2008 downtrend
and Nov 2010 high. It appears that within the few months EURUSD has broken out of key supply at 1.41-1.43. If EURUSD sustains this breakout then this would validate
an intermediate-term trend reversal leading to a retest of 200/2011 highs at 1.4941-1.5143 and possibly to 2008 highs at 1.6036, over time. On the other hand, a decline
below 1.40-1.41 negates breakout and returns EUR/USD to secondary support at 1.35-1.36 or Jun 2010 uptrend and then 1.2878-1.2975 or Dec 2010/Jan 2011 lows.
18

20. Commodities – CRB Index Retracement Study
Symmetrical triangle breakout late last year renders upside  365-379. Failure
to breakout here coupled with 30 May 2011 negative outside week suggests a
corrective phase to initial support at 325-335. Below 320-325  300 area.
379
365 367
61.8% = 369
50% = 337
38.2% = 305
10-week ma = 353
30-week ma = 341
10-month ma = 334 Feb 2010 low = 229.93
30-month ma = 282
Feb 2009 low = 200.16
19

21. COMEX Gold – Intermediate and Long-term Outlook
Negative outside week on 2 May 2011
10-month ma = 1,429
30-month ma = 1,184
10-week ma = 1,514
30-week ma = 1,429
Longer-term trend remains bullish. However, Gold recently encountered strong supply near its converging uptrend channels including 2008 uptrend channel at 1,600 and 2006 uptrend
channel at 1,560. A near-term overbought condition accompanied by a negative outside week during 2 May 2011 signal the start of a consolidation phase. We believe the correction will set
the stage for resumption of primary uptrend. The width of 2008 uptrend channel is approximately 200 points. A breakout above 1,575-1,600 confirms the next major move up towards a
projected technical target to 1,800. If a speculative Gold rally develops similar in scope to 1976-1980 (101 to 873 or 764% gains or x 8.64) then Gold can rally to an extreme high of 1,950-
2,205, longer-term or close to the inflation adjusted target associated with the Jan 1980 high. Based on a high level consolidation Gold can trade sideways between 1,450 +/- 20 on the
downside and 1,600 +/- 20 before its resumes its uptrend. 1,390-1,430 or 2008 uptrend, Jul 2010 uptrend, 10-month ma, 30-week ma and 50%-61.8% retracement from Jan 2011 rally
provides crucial intermediate term support. Violation here confirms an intermediate-term top and the start of a deeper and extensive downturn.
20

22. Crude Oil – Light Sweet
Sep 2008 high = 130
76.4% = 120.35
10-week ma = 105
30-week ma = 97
10-month ma = 95
May/Jul/Aug 2010 lows = 67-71 30-month ma = 78
Crude Oil has recently achieved our near-to-intermediate targets of 106-107 and proceeded to a high of 114.83 on 2 May 2011. An overbought condition prompted the
start of a corrective which we believe is still developing. Although we still remain favorable on the intermediate-to-longer outlook and believe upside targets to 120 and
as high as 125-130 are achievable over time, recent negative actions during Apr/May 2011 suggest a cautious near-term view. The negative outside day/weeks during 2
May 2011 as well as violation of an internal uptrend channel near 101-103 and a potential 3-month head/shoulders top pattern suggest consolidations are necessary to
repair the near-term technical damages. Key challenge is to maintain its key near-term support near 95 +/- 2 corresponding to neckline support or Mar/May 2011 lows,
Aug 2010 uptrend, and 30-week ma. Violation here would confirm a top and open the door for a deeper correction to secondary support at 88-90 or Feb 2011 upside gap.
82 +/- 2 remains intermediate-term support. On the upside, a convincing surge above initial supply at 105-107 helps to negate a potential 3-month head/shoulders top
allowing for a retest of Apr/May 2011 highs near 113.5-115. Above 115 allows for the resumption of the 2009 cyclical bull rally.
21

23. Fixed Income – US 10-Year Yields vs. 30-Year Yields
10-Year Yields remains in a 29-year Secular 30-Year Yields also remains in a 29-year Secular
downtrend. It continues to diverge from downtrend. It recently traded to the top of its
30-Year Yields as it is nearly 129 BP from regression band. Currently 53 BP from top of channel.
the top of its channel and is approaching
midpoint of its linear regression band.
10-month ma = 4.26%
30-month ma = 4.19%
10-month ma = 3.08%
30-month ma = 3.21%
30-Year Yields has
emerged as a leading
Inflationary indicator of future US
interest rate trends.
Inflationary
Disinflationary
Top of Band = 4.29%
Disinflationary
Middle of Band = 2.94% Top of Band = 4.75%
Bottom of Band = 1.59% Middle of Band = 3.65%
Bottom of Band = 2.55%
1st Trading range = 2.8%-3.25%
2nd Trading range = 2.4%-3.75% 1st Trading range = 4.0%-4.4%
3rd Trading range = 2.0%-4.0% Deflationary
2nd Trading range = 3.8%-4.8%
3rd Trading range = 3.45%-5.1%
Deflationary
22

24. Fixed Income – US 10-Year Treasury - Intermediate
Symmetrical Triangle Pattern? Resistance  3.75%-3.8%, 4.01%, 4.3-4.4%, 4.7-4.9%
Support  3.1-3.2%, 2.7-2.85%, 2.33%-2.45%, 2.04%
Key supply = 3.8-4.0%
Near-term support = 3.1%-3.2%
10-week ma = 3.22%
30-week ma = 3.30%
10-month ma = 3.08%
30-month ma = 3.22%
Key support = 2.4%
A large symmetrical triangle pattern has been developing since 2008. The convergence of the trend lines have yet to resolved and as such we expect a volatile trading
environment for TNX as it is confined to a range between 2.5% and 3.8%. Breakout occurs above 3.8%-4.0% and breakdown occurs on violation below 2.4-2.5%. On a
near-term basis, a 7-month head and shoulders top pattern has been confirmed via recent breakdown below pivotal neckline support near 3.13%-3.15%. Violation here
now renders downside targets to 2.33-2.5% or 2008 uptrend and 2010 lows. A potential weekly death cross sell signal is developing as 10-week ma has fallen below 30-
week ma. Initial supply is now evident near 3.1%-3.2% and then 3.57-3.74%. 3.8-4.0% remains key intermediate-term supply.
23

25. Fixed Income – Spreads between 10 and 2-Year Yields
May 2011
Mar 2010 = 2.822
= 2.58
Sep 1992 = 2.575 Jul 2003 = 2.675 Jan 2011 = 2.818
2.358-2.417
1.875-2.005
1.463-1.469
Historical Yield Spread = 75-100 bp
Mar 1889 = -0.402 Mar 2000 = -0.474 Nov 2006 = -0.15
After a brief contraction during the first half of last year the 10-year and 2-year Treasury yield spreads have expanded again. However it has failed to
breakout during Jan 2011 trading to a high of 2.818 before backing off from key supply at 2.822 corresponding to the March 2010 peak. Failure to
breakout here signals the start of a contraction in spreads possibly leading to a decline towards 2.358-2.417. Violation here opens the door for a retest of
major secondary support at 1.875-2.005 and then 1.463-1.469.
24

26. Fixed Income – Spreads between 30 and 10-Year Yields
Oct 2010 = 1.383
Divergences between 30/10 year and 10/2-year yield spreads continues Jan 2011 = 1.201
Jun 2011 = 1.22
Sep 1992 = 1.028 Oct 2002 = 1.099
.9-1.0
Historical Yield Spread = 40-55 bp
Feb2006 = -0.42
Mar 1889 = -0.181
May 2000 = -0.260
Divergences between 30/10 year yield and 10/2-year yield spreads continue to suggest widespread confusion. A major breakout developed late last year
above Sep 1992 and Oct 2002 highs at 1.028-1.099. This breakout resulted in a strong surge towards a high of 1.383 established on Oct 2010. Since then
it has contracted back to prior breakout range of 1.028-1.099. It appears the recent successful test is triggering another expansion in spreads to Oct 2010
peak. Key crucial secondary support remains .9-1.0. The historical yield spread between 30 and 10 yield spread continues to be .40-.55.
25

27. Stock Market Cycle and Business Cycle
Stock Market Top Business Cycle Peak
Stock Market cycle tends to
lead the Business Cycle by Business Cycle
3-6 months window Late Bull Stock Market Cycle
Early Bear
Middle
Recession
Middle Bull
Middle Bear
Middle Recovery
Early Bull
Late Bear
Stock Market Bottom Business Cycle Trough
26

28. One Complete Economic Cycle, Sector Rotation & Duration
Early Expansion – 12 to18 months
Early Middle Late Early Late  Inflation = Continue to fall
Expansion Expansion Expansion Contraction Contraction  Interest Rates = Bottoming out
Are we here?  Middle Expansion – 12 to18 months
 Inflation = Bottoming out
Energy Moving towards
 Interest Rates = Rising modestly
late expansion?
Basic Consumer Late Expansion – 12 to18 months
Materials Staples  Inflation = Rising
Capital Goods  Interest Rates = Rising rapidly
Utilities Early Contraction – 6 to 9 months
Services  Inflation = Rising less strongly
Financials  Interest Rates = Peaking
Technology
Deep Contraction – 6 to 9 months
 Inflation = Flat to Declining
Consumer Cyclicals  Interest Rates = Falling
Transportation
1 complete cycle – 48 to 72 months
or 4 to 6 years
27

29. S&P 500 Sectors – Current Market Capitalization
Technology remains the largest and most influential sector by market cap weighing (17.88%)
followed by Financials (14.92%) and then Energy (12.78%). These top 3 sectors comprised
nearly 45.58% of the overall SPX. Consumer Staples, Healthcare, and Industrials collectively
represent another 33.9% of SPX.
For the March 2009 cyclical bull rally to sustain many of the larger market-cap weighted S&P
sectors need to participate to the upside. The two largest sectors, Technology and Financials,
have underperformed the market. However, their weaknesses have been offset by strengths
from Healthcare, Consumer Staples, Industrials and Consumer Discretionary.
28

30. S&P 500 Sectors – Rotation from Oct 2002 – Oct 2007
Commodities based sectors including Materials and economically
sensitive sectors such as Industrials and Capital Goods led during the
prior cyclical bull rally (2002-2007). Technology also outperformed
during the latter stage of the 2002-2007 cyclical bull.
Leaders Materials
Technology
Industrials
Laggards
Consumer Discretionary
Financials
29

31. S&P 500 Sectors – Rotation from Oct 2002 – Oct 2007
During the prior cyclical bull rally from 2002-2007 leadership were
also heavily concentrated within natural resource intensive sectors
including Energy and Infrastructure industries such as Utilities.
Classic defensive related sectors including Consumer Staples and
Healthcare all severely underperformed peers.
Energy
Leaders
Utilities
Communications
Laggards
Consumer Staples
Healthcare
30

32. S&P 500 Sectors – Rotation from March 6, 2009 low
As can be expected during the early stages of a recovery, pro-cyclical sectors
and previous battered sectors (Financials) tend to lead from the March 2009
bottom. Since summer 2009, Financials sector has been basically flat to down.
Although maturing, the economically sensitive sectors including Consumer
Discretionary, Industrials and Materials continue to outperform peers. This
action bodes well for the continuation of cyclical bull trend as we expect
market to grind higher during the back half of recovery phase. Technology, an
early cycle economic sector, although still slightly outperforming SPX Index has
lost considerable relative strength. Decreasing relative strengths from cyclical
sectors accompanied by increasing relative strengths from defensive sectors
further warn of the maturing of the cyclical bull rally.
Financials
Consumer Discretionary
Industrials
Materials
Technology
31

33. S&P 500 Sectors – Rotation from March 6, 2009 low
Energy
Healthcare
Consumer Staples
Utilities
Communications
Defensive sectors such as Utilities, Healthcare, and Consumer Staples tend to
outperform during the later stage of an economic recovery/expansion cycle. The two
classic defensive sectors, Healthcare and Consumer Staples have been showing
improving relative strengths. Communications and Utilities (income plays) have also
improved on a near-term basis. Energy, a late-cycle economically sensitive sector
have faltered near its 100 indexed level. Will it again challenge its high?
32

34. S&P 500 Sectors – Rotation from July 1, 2010 low
Materials
Consumer Discretionary
Industrials
Technology
Financials
Since Jul 2010 low, Basic Materials retains its relative strength on backdrop of
higher commodity prices, a recovery in Emerging Markets and an continued
risk taking. However, some near-term divergence is developing as it has failed
to breakout during recent April rally. Consumer Discretionary continue to
show sustained relative strength readings but both are trading below their
respective peaks of Nov/Dec 2010 and Feb/Mar/Apr 2011. Technology sector
has weakened as it has failed to breakout above its Apr/May highs slipping
below 100. Financials sector continue to fall further declining below its
Oct/Nov 2010 reaction lows implying lack of sponsorships.
33

35. S&P 500 Sectors – Rotation from July 1, 2010 low
The defensive sectors such as Healthcare, Consumer Staples, Communications and
Utilities have begun to outperform SPX on a near-term basis. Energy, a late cycle
sector, appears to be entering into a trading range. Historically, relative strength
readings of defensive sectors tend to increase slowly at first but begin to accelerate
against the SPX and economically sensitive groups at the end of an expansion cycle.
Energy
Communications
Healthcare
Consumer Staples
Utilities
34

36. SPX versus MSCI Emerging Market Index
This monthly relative strength study shows a large breakout during
Summer 2010 signaling long-term performance coming from MSCI
Emerging Markets Index in relationship to SPX Index. However, since
Sep 2010 relative strength readings have declined but appears to have
found key support is now above its prior breakout suggesting the
resumption of long-term leadership coming from Emerging Markets.
Above 73-74  Emerging Markets Outperforms SPX
75
Below 49-50  Emerging Markets Underperforms SPX
35

37. SPX versus Emerging/Developing Countries
Although money has recently returned to developed Equities including EAFE
and Japan the longer-term relative strength readings continue to favor
outperformance coming from Emerging Markets in relationships to Developed
Markets over the longer-term. Russian Equities has clearly benefited from the
sharp appreciation in Commodities as nearly 70% its overall market cap is
comprised of Energy, Industrial and Materials. Brazil has been surprisingly
weak over the past 1.5 year but may begin to relatively outperform.
Russia = 2,880
Brazil =
Brazil = 768
India = 557
EM = 346
China = 189
EAFE = 112
Japan = 60
36

38. US Mega Cap Stock Outperformance – Nifty-Fifty II
MS Multinational Index (NFT) or US Mega Cap stocks/Nifty Fifty II stocks has
underperformed SPX for the past 2+ years. It has quietly slipped back towards
crucial support coinciding with the extension of Trend line 2 and appears to be
bouncing off of this key support indicating a recovery. However, it still needs
further technical work. Above 108-109 is needed to solidify a successful test leading
to a rotation back to NFT versus SPX. On the other hand, violation of Trend line 2
confirms a major breakdown leading to underperformance from NFT versus SPX.
Breakout
Trend 3
107
Trend 1
Trend 2
Breakdown
37

39. Mid-Cap Stock Outperformance
S&P Mid-cap 400 Index (MID) or Mid Cap stocks has dramatically outperformed
S&P 500 Index or Large Cap stocks since 1999. In fact, since the March 2009
market bottom it has picked up its pace of outperformance. We find it
interesting that this is strikingly similar to the prior 1999-2002 and 2003-2006
outperformance cycles – each cycle lasted nearly 3-years. Does this then imply
MID will continue to outperform SPX until at least 2012?
198
MID outperforms SPX
MID underperforms SPX
38

40. Growth versus Value
SGX/SVX relative strength chart shows the performance between S&P Growth Index
and S&P Value Index. A large pennant/flag formation hints of the potential for a
continuation breakout (above 127-128) and the reemergence of Growth style
investing over Value style investing. On the other hand, violation of 120-122
confirms a breakdown favoring Value style investing.
Value outperformed Growth
Growth outperforms during the Tech/Telecom
Value during the bubble decline
Tech/Telecom Boom
A large 2+ year pennant/flag
formation is a continuation
pattern still favoring Growth
over Value
125
Breakdown led to Value
outperforming Growth
39

41. SPX Dividend Yields
Recent violation of support signals lower SPX yields. In the past, when SPX yields have
fallen this has ignited SPX rallies. In contrast, when SPX yields have rallied this has led
to SPX corrections or bear market declines. The recent breakdown in SPX yields bodes
well for the continuation of the March 2009 cyclical bull rally.
SPX Yields declining
SPX Yields rising
SPX Yields declining Yields rising 
market correction
1.66%
Since 1970s 43% of SPX Yields falling 
total returns came from SPX Yields has been a good proxy for risk market rally
dividend yields. taking/risk aversion and as such may
again play a crucial role in stock trends.
40

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broker dealer affiliated with UBS, and not through a non-US affiliate.
 UBS 2011. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.
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43. Contact Information
Peter Lee
UBS Financial Services Inc.
peter.lee@ubs.com
212-713-8888 Ext 01
UBS Financial Services
Wealth Management Research
NY, NY 10019
www.ubs.com
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