June 2011 Technical Market Outlook

Peter Lee – Chief Technical StrategistWealth 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”).

1

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.

2

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.

3

Psychology of the Market – Fear, Greed and Hope

Optimism

Excitement

Thrill

Greed/Euphoria – 2nd

half 2007

Anxiety

Denial

Fear

Desperation – 2nd

half 2008

Panic

Capitulation

DespondencyDepression – 1

st Qtr 2009

Hope

Relief

Optimism

Are we here?

2nd Half 2011

and into 2012

4

SPX Index – Secular Trends from 1900 to Present

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.

1

10

100

1,000

10,000

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2009

Secular Bear Trading Range

Secular Bull1982-2000

Secular Bear Trading Range

Secular Bull1949-1965

Secular Bear Trading Range

Secular Bull1921-1929

Secular Bear Trading Range

For the past 200+ years, SPX has consistently alternated between periods of long-term bullishness via secular bull trends and periods of long-term bearishness via secular bear/trading range trends without ever missing a single cycle.

5

SPX Index – Long-Term Secular Trend (Monthly Log Chart)

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?

1942 Uptrend = 665

1932 Uptrend = 425__

__

6

Similarities – DJIA 1966 to 1982 and SPX 1997 to Present

1966 - 1982

16-year Head and Shoulders Bottom

Midpoint = 820-830

Another 8 years to form right shoulders

8 years to form left shoulders

1997 - Present

Midpoint = 1,120-1,160

10 years to form left shoulders

Another 5-10 years to form right shoulders?

Golden Cross Buy

signal

Head and Shoulders Bottom??

Death Cross Sell signal

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?

7

SPX Index – Positive/Negative Outside Months

Positive Outside Month = Emerging Market Crisis –

Oct 98

Positive Outside Month = Tech/Telecom Bubble –

Mar 03

Positive Outside Month = Real Estate, Credit, Deleveraging and Global Financial Crisis –

Jul 09

Positive Outside Months Bullish Negative Outside Months Bearish

Oct 1999

Positive Outside Months = Oct 04/Jul 05/Jan 06

Negative Outside Months = Jan, Jul, and Sep 2000

Negative Outside Months = Feb/Jul 2007

Negative Outside Months = Mar 04/Mar 05/May 06

Negative Outside Month = Jan 2010

Negative Outside Month = Jan 2009

Monthly Death Cross Sell April 2001 and July 2008

Monthly Golden Cross Buy on Jan 2004/June 2010

10-month ma = 1,270 30-month ma = 1,096

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.

8

Statistics on 4-Year Mid-term Election, 10-year Decennial Year, Jan Barometer and Pre-Election Year CyclesMid-term

SPX Yearly

Intra-Year

Election

Returns

Corrections1930

-28.5%

-44.3%

1934

-4.7%

-29.3%1938

24.6%

-28.9%

1942

12.4%

-17.8%1946

-11.9%

-26.7%

1950

21.7%

-14.0%1954

45.0%

-4.4%

1958

38.1%

-4.4%1962

-11.8%

-26.9%

1966

-13.1%

-22.2%1970

0.1%

-25.9%

1974

-29.7%

-37.6%1978

1.1%

-13.6%

1982

14.8%

-16.6%1986

14.6%

-9.4%

1990

-6.6%

-19.9%1994

-1.5%

-8.9%

1998

26.7%

-19.3%2002

-23.4%

-33.8%

2006

13.6%

-7.7%2010

12.8%

-17.1%

Avg. (21)

4.5%(ex div)

-20.4%

Decennial SPX Yearly

Intra-Year

Year (0)

Returns

Corrections1930

-28.5%

-44.3%

1940

-15.1%

-29.6%1950

21.7%

-14.0%

1960

-3.0%

-11.5%1970

0.1%

-25.9%

1980

25.8%

-17.1%1990

-6.6%

-19.9%

2000

-10.1%

-17.2%2010

12.8%

-17.1%

Avg. (9)

-0.32%

-21.8%

Jan

SPX Year

Down Jan Jan CloselowMarket

1953

-6.6%

-0.7%

-13.9%

Bear1956

2.6%

-3.6%

0.9%

Flat

1957

-14.3%

-4.2%

-12.8%

Bear1960

-3.0%

-7.1%

-6.0%

Bear

1962

-11.8%

-3.8%

-24.0%

Bear1968

7.7%

-4.4%

-4.9%

Cont. Bear

1969

-11.4%

-0.8%

-13.4%

Bear1970

0.1%

-7.6%

-18.6%

Cont. Bear

1973

-17.4%

-1.7%

-20.6%

Bear1974

-29.7%

-1.0%

-35.5%

Bear

1977

-11.5%

-5.1%

-11.1%

Bear1978

1.1%

-6.2%

-2.6%

Cont. Bear

1981

-9.7%

-4.6%

-13.0% Bear1982

14.8% -1.8%

-14.9%

Cont. Bear

1984

1.4%

-0.9%

-9.5%

Flat1990

-6.6%

-6.9%

-10.2%

Bear

1992

4.5%

-2.0%

-3.5%

Flat2000

-10.1%

-5.1%

-9.3%

Bear

2002

-23.4%

-1.6%

-31.3%

Bear2003

26.4%

-2.7%

-6.4%

Cont. Bear

2005

3.0%

-2.5%

-3.7%

Flat2008

-38.5%

-6.1%

-46.3%

Bear

2009

23.46%

-9.4%

-28.6%

Cont. Bear2010

12.8%

-3.7%

-5.87% Cont. Bear

Avg(24)

-4.0%

-3.9%

-14.4%

24 Down Januarys 13 SPX down Yrs and 11 up Yrs

Mid-term

DJIA Pre-

DJIA GainsElection low

Election Yr Hi

low-hi / Year

Jul 1914 Dec 1915

89.6% / 87.1% Jan 1918

Nov 1919

63.0% / 30.5%

Jan 1922

Mar 1923

34.1% / -3.3%Mar1926

Dec 1927

49.7% / 28.8%

Dec 1930

Feb 1931

23.4% / -52.7%Jul 1934

Nov 1935

73.6% / 38.5%

Mar 1938

Sep 1939

57.6% / -2.9%Apr 1942

Jul 1943

56.9% / 13.8%

Oct1946

Jul 1947

14.5% / 2.2%Jan 1950

Sep 1951

40.4% / 14.4%

Jan 1954

Dec 1955

74.5% / 20.8%Feb 1958

Dec 1959

55.5% / 16.4%

Jun 1962

Dec 1963

43.2% / 17.0%Oct 1966

Sep 1967

26.7% / 15.2%

May 1970

Apr 1971

50.6% / 6.1%Dec 1974

Jul 1975

52.7% / 38.3%

Feb 1978

Oct 1979

21.0% / 4.2%Aug 1982

Nov 1983

65.7% / 20.3%

Jan 1986

Aug 1987

81.2% / 2.3%Oct 1990

Dec 1991

34.0% / 20.3%

Apr 1994

Dec 1995

45.2%/ 33.5%Aug 1998

Dec 1999

52.5% / 25.2%

Oct 2002

Dec 2003

43.5% / 25.3%Jan 2006

Oct 2007

33.18% / 24.4%

Jul 2010

??? 2011

??? / ???

Avg. (24)May

Sep(15.5 mo)

49.3% / 17.7%

Highest frequencies of Mid-term lows:Jan (6) and Oct (4)

Highest frequencies of Pre-election highs:Dec (9) and Jul/Sep/Nov (3 each)

9

S&P 500 Index Statistics - Mid-term to Pre-Election Year, Sept & Oct Mid-term Returns and Frequencies of Bottoms

Mid-term Elections

Intra-Day Low

Following Year's Close

% Change

1934 8.36 13.43 61%

1938 8.5 12.46 47%

1942 7.47 11.67 56%

1946 14.12 15.3 8%

1950 16.66 23.69 42%

1954 24.8 45.48 83%

1958 40.33 59.89 48%

1962 52.32 75.02 43%

1966 73.2 96.47 32%

1970 69.29 102.09 47%

1974 62.28 90.19 45%

1978 86.9 107.84 24%

1982 102.2 164.93 61%

1986 202.6 247.08 22%

1990 294.51 417.09 42%

1994 435.86 615.93 41%

1998 912.83 1469.25 61%

2002 768.63 1111.92 45%

2006 1219.29 1478.49 21%

Mid-term Years AVERAGE: 43.7%

All Years -1928-2008 AVERAGE: 28.99%

% of years S&P decreased: 15%

All Years ex-Mid-term AVERAGE: 24.50%

% of years S&P decreased: 19.00%

Mid-term Election Years Only Mid-term % Mid-term %

Septembers Change Octobers Change

9/30/1934 -0.50% 10/31/1934 -3.20%

9/30/1938 1.50% 10/31/1938 7.60%

9/30/1942 2.70% 10/31/1942 5.80%

9/30/1946 -10.20% 10/31/1946 -0.80%

9/30/1950 5.60% 10/31/1950 0.40%

9/30/1954 8.30% 10/31/1954 -1.90%

9/30/1958 4.80% 10/31/1958 2.50%

9/30/1962 -4.80% 10/31/1962 0.40%

9/30/1966 -0.70% 10/31/1966 4.80%

9/30/1970 3.30% 10/31/1970 -1.10%

9/30/1974 -11.90% 10/31/1974 16.30%

9/30/1978 -0.70% 10/31/1978 -9.20%

9/30/1982 0.80% 10/31/1982 11.00%

9/30/1986 -8.50% 10/31/1986 5.50%

9/30/1990 -5.10% 10/31/1990 -0.70%

9/30/1994 -2.70% 10/31/1994 2.10%

9/30/1998 6.20% 10/31/1998 8.00%

9/30/2002 -11.00% 10/31/2002 8.60%

9/30/2006 2.50% 10/31/2006 3.20%

9/30/2010 8.80% 10/31/2010

All periods: -0.58% 3.12%

Positive Sept: 4.45% Pos Sept&Oct: 3.94%

Mid-Term Low / Month

% of Occurrences Total

January 5 26.32%1950 (Bull); 1954 (Bull); 1958 (Bull); 1986 (Bull); 1998 (Bull)

October 5 26.32%1946 (Bear); 1966 (Bear); 1974 (Bear); 1990 (Bull); 2002 (Bear)

April 2 10.53%

1942 (Bear; 1994 (Bull)

March 2 10.53%1938 (Bear); 1978 (Bear)

June 2 10.53%

1962 (Bull); 2006 (Bear)

August 1 5.27%

1982 (Bear)

July 1 5.27%

1934 (Bear)

May 1 5.27%

1970 (Bear)

December 0 0.00%

February 0 0.00%

November 0 0.00%

September 0 0.00%

19 100%

No Occurrences towards the

end of the year

Sept 2010 = 8.76% Oct 2010 = 3.69%Applying 43.7% to SPX 2010 mid-term low of 1,010.91 suggests upside to 1,453

by 2011

10

SPX Seasonality Study – Monthly Returns from 1929-2010Yearly %

Time 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 6.021929-2010 Mkt 81 years 2.71 2.90

0.45 0.48

Bear1929-1949 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

Bull1949-1966 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

Bear1966-1982 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 3.000.02 0.82

Bull1982-2000 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 5.680.18 0.41

Bear2000-2010 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 1.85Average returns for three months 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 11.85Average returns for three months 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 10.812.92 4.36

* note: Monthly returns for 2010 are not included.

Source: Reuters, Bloomberg, and UBS WMR

Since 2011 is a pre-election year, a 10.81% average yearly

suggests SPX upside target to 1,394 by the end of the year.

June tends to be a favorable month with average returns of 1.48%

during

Pre-election years.

11

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.

12

SPX Index – Longer Term Outlook (1+ year)

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.

How high is high?

61.8% = 1,228.74

50% = 1,121.44

38.2% = 1,014.14

Mar 09 low = 666.79 Jul 09 low = 869.32 July 10 low = 1,010.91 Aug 10 low = 1,039.70 Nov 10 low = 1,173.00 Mar 11 low = 1,249.05

2010 target 1,220-1,250

2009 target 1,121

Jan-Jul 2009 high = 943-956

76.4% = 1,361.501st

qtr 2011 target 1,348-1,362

Nov 2008 high = 1,007.51

May 2008 high = 1,440.24Breakout above 1,227 1,443-1,445

Since 1934, from Mid-term Year low to Pre-election Year-end has averaged 43.7% gains. If history is repeated then SPX can rally to a high of

1,453

this year.

13

SPX Index – Intermediate-term Outlook (3-12 months)

Jul 09 low =869.32

Uptrend Channel from March 2009 still intact. Top of Channel 1,470 Bottom of Channel 1,235-1,240

Apr 10 high = 1,219.80

Feb/May/Jul/Aug 10 lows = 1,011-1,045

Nov 10 high = 1,227.08

10-week ma = 1,328 30-week ma = 1,296

Jan/Jun/Jul/Aug 10 highs =1,120-1,150

200-day ma = 1,252

Negative Outside weeks on May/June 2011

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.

Mar09 lows = 666.79

Mar 11 low = 1,249.05

38.2% = 1,101.73

23.6% = 1,204.49

50% = 1,018.69

61.8% = 935.64

14

SPX Index – Intermediate-term Outlook (3-12 months)

Feb/May/Aug 10 lows =1,040-1,045

Feb-Apr 2011 head/shoulders bottom breakout negated retest key intermediate-term support at 1,220-1,250

Apr 10 high = 1,219.80

150-day ma = 1,290

Nov/Dec 10 lows = 1,173-1,186

Nov 10 high = 1,227.08

30-day ma = 1,330 50-day ma =1,329 150-day ma = 1,290 200-day ma = 1,252

Jan/Jun/Jul/Aug 10 highs =1,120-1,150

200-day ma = 1,252

Downside gaps on May/June 2011

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.

Jul 10 lows = 1,010.91

Mar 11 low = 1,249.0538.2% = 1,233

50% = 1,190

61.8% = 1,148

15

SPX Index – Shorter-term Outlook (1-3 months)

1-month channel breakdown in low-1,300s suggests a projected decline of 41-points or target to 1,260.

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.

Apr 2010 correction = -17.1% Aug 2010 correction = -7.9% Nov 2010 correction = -4.4% 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

1 Jun 2011 = negative outside day and negative outside week

1,337

1,296

2 May 2011 = negative outside day and negative outside week

16

US Dollar Index – Monthly Secular Long-term Trend

Long-term pattern Head and Shoulders Top Intermediate pattern Symmetrical Triangle

Left Shoulders

Head = 120-121

Right Shoulders

Breakout > 89-92.5

10-month ma = 77 30-month ma = 80

Breakdown below 74.21-75.24 72.86 and then

71.05-71.21

Neckline Support = 70-71

Top of band = 106 Middle of Band = 85 Bottom of band = 65

86

Shorter-term range = 72.86– 76-77

Intermediate range = 70-71 – 81.5-83.5

Long-term range = 59-60 – 89-92.5

17

US Dollar Index – Retracement Study - Intermediate

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.

38.2% = 90.24

23.6% = 82.91

Dec 2004 low = 80.48

Breakdown

Breakout

50% = 96.17

61.8% = 102.10

50% = 81.96

61.8% = 83.79

76.4% = 86.05

10-week ma = 75 30-week ma = 77

Apr 2008 low = 71.05

May 2006 low = 83.41

Jun 2010 high = 88.80

Symmetrical Triangle breakdown

18

EURO/USD – Intermediate-term Outlook

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.

61.8% = 1.12

76.4% = 1.01

Head and shoulders top or a long-term basing pattern?

50% = 1.21

31.8% = 1.31

50% = 81.96

10-week ma = 1.44 30-week ma = 1.39 Neckline Support = 1.1643-1.1880

10-mo ma = 1.39 30-mo ma = 1.37

Downtrend breakout?

19

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.

Feb 2010 low = 229.93

50% = 337

61.8% = 369

38.2% = 305

10-week ma = 353 30-week ma = 341

10-month ma = 334 30-month ma = 282

Feb 2009 low = 200.16

365 367379

20

COMEX Gold – Intermediate and Long-term Outlook

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.

10-week ma = 1,514 30-week ma = 1,429

10-month ma = 1,429 30-month ma = 1,184

Negative outside week on 2 May 2011

21

Crude Oil – Light Sweet

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.

May/Jul/Aug 2010 lows = 67-71

10-week ma = 105 30-week ma = 97

10-month ma = 95 30-month ma = 78

Sep 2008 high = 130

76.4% = 120.35

22

Fixed Income – US 10-Year Yields vs. 30-Year Yields

10-Year Yields remains in a 29-year Secular downtrend. It continues to diverge from 30-Year Yields as it is nearly 129 BP

from

the top of its channel and is approaching midpoint of its linear regression band.

Inflationary

Top of Band = 4.29% Middle of Band = 2.94% Bottom of Band = 1.59%

1st Trading range = 2.8%-3.25%

2nd Trading range = 2.4%-3.75% 3rd

Trading range = 2.0%-4.0% Deflationary

10-month ma = 3.08% 30-month ma = 3.21%

Top of Band = 4.75% Middle of Band = 3.65% Bottom of Band = 2.55%

Deflationary

Inflationary

Disinflationary

Disinflationary

30-Year Yields also remains in a 29-year Secular downtrend. It recently traded to the top of its regression band. Currently 53 BP

from top of channel.

10-month ma = 4.26% 30-month ma = 4.19%

1st Trading range = 4.0%-4.4%

2nd Trading range = 3.8%-4.8% 3rd

Trading range = 3.45%-5.1%

30-Year Yields has emerged as a leading indicator of future US interest rate trends.

23

Fixed Income – US 10-Year Treasury - Intermediate

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.

Symmetrical Triangle Pattern?

Key support = 2.4%

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%

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%

24

Fixed Income – Spreads between 10 and 2-Year Yields

Jul 2003 = 2.675Sep 1992 = 2.575

Mar 2000 = -0.474Mar 1889 = -0.402 Nov 2006 = -0.15

Mar 2010 = 2.822 Jan 2011 = 2.818

Historical Yield Spread = 75-100 bp

1.875-2.005

1.463-1.469

May 2011 = 2.58

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.

2.358-2.417

25

Fixed Income – Spreads between 30 and 10-Year Yields

Divergences between 30/10 year and 10/2-year yield spreads continuesJun 2011 = 1.22

Sep 1992 = 1.028

May 2000 = -0.260

Mar 1889 = -0.181Feb2006 = -0.42

Oct 2010 = 1.383

Historical Yield Spread = 40-55 bp

Jan 2011 = 1.201

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.

.9-1.0

Oct 2002 = 1.099

26

Stock Market Cycle and Business Cycle

Stock Market Top Business Cycle Peak

Early Bull

Middle Bull

Late Bull

Early Bear

Middle Bear

Late Bear

Middle Recovery

Middle Recession

Stock Market Bottom Business Cycle Trough

Business Cycle

Stock Market Cycle

Stock Market cycle tends to lead the Business Cycle by 3-6 months window

27

One Complete Economic Cycle, Sector Rotation & Duration

Early Expansion

Middle Expansion

Late Expansion

Early Contraction

Late Contraction

Transportation

Technology

Services

Capital Goods

Basic Materials

Energy

Consumer Staples

Utilities

Financials

Consumer Cyclicals

Are we here?

Early Expansion – 12 to18 months

Inflation = Continue to fall

Interest Rates = Bottoming out

Middle Expansion – 12 to18 months

Inflation = Bottoming out

Interest Rates = Rising modestly

Late Expansion – 12 to18 months

Inflation = Rising

Interest Rates = Rising rapidly

Early Contraction – 6 to 9 months

Inflation = Rising less strongly

Interest Rates = Peaking

Deep Contraction – 6 to 9 months

Inflation = Flat to Declining

Interest Rates = Falling

1 complete cycle – 48 to 72 months

or 4 to 6 years

Moving towards late expansion?

28

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.

29

S&P 500 Sectors – Rotation from Oct 2002 – Oct 2007

Materials

Technology

Industrials

Consumer DiscretionaryFinancials

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

Laggards

30

S&P 500 Sectors – Rotation from Oct 2002 – Oct 2007

Energy

Utilities

HealthcareConsumer Staples

Communications

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.

Laggards

Leaders

31

S&P 500 Sectors – Rotation from March 6, 2009 low

Financials

Consumer Discretionary

Technology

Industrials

Materials

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.

32

S&P 500 Sectors – Rotation from March 6, 2009 low

Utilities

HealthcareConsumer Staples

Energy

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?

33

S&P 500 Sectors – Rotation from July 1, 2010 low

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.

Financials

Materials

Industrials

Consumer Discretionary

Technology

34

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

Healthcare

Utilities

Communications

Consumer Staples

35

SPX versus MSCI Emerging Market Index

Above 73-74 Emerging Markets Outperforms SPX

Below 49-50 Emerging Markets Underperforms SPX

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.

75

36

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 = 557EM = 346

China = 189EAFE = 112

Japan = 60

37

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

Breakdown

107

Trend 1Trend 2

Trend 3

38

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?

MID outperforms SPX

MID underperforms SPX

198

39

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.

Breakdown led to Value outperforming Growth

Growth outperforms Value during the Tech/Telecom Boom

Value outperformed Growth during the Tech/Telecom bubble decline

125

A large 2+ year pennant/flag formation is a continuation pattern still favoring Growth over Value

40

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 risingSPX Yields declining

Since 1970s 43% of SPX

total returns came from dividend yields.

1.66%

SPX Yields has been a good proxy for risk taking/risk aversion and as such may again play a crucial role in stock trends.

Yields rising market correction

Yields falling market rally

SPX Yields declining

41

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Contact Information

UBS Financial ServicesWealth Management ResearchNY, NY 10019www.ubs.com

Peter Lee UBS Financial Services Inc. peter.lee@ubs.com

212-713-8888 Ext 01