If the S&P 500 can continue to push higher for one more session, investors could see a turning point for the index and a strong signal for a bull market, independent trader Bill McLaren told CNBC Friday.
Analyzing weekly trends since the July 2009 low, McLaren noted that three large thrusts downwards in recent activity have been complemented by retracements that "have been very large."
"That indicates the pattern of trend has not been as sharp as it might appear," the trader said.
For now, McLaren said, the market must avoid a false break and rally for another day.
"If we can exceed this fourth day, it's going to make the low look solid and we can assume a selloff will produce a higher low," he said, indicating that a higher low "on the 24th" would be an "extremely bullish" signal.
If the index disappoints, however, a "struggling" bear market could be on the horizon; yet, McLaren noted he is "less certain" on a drop to 950 for the S&P.
Will Gold Break Support?
On precious metals, McLaren noted his expected top in gold has been met as forecast and indicated he expects gold to continue a trend lower towards the $1075-1051 range.
But to meet those levels, he believes, gold has to break its current support "in the next week."
"I didn't think it would hold...but it did," McLaren said.
Read a Range of Market Views:
- Is Rally Sustainable?
- A Bear Market Rally is Still a Rally
- Repeat of 2008 Selloff on Horizon: Hedge Fund Manager
Scorecard—What He Said:
- McLaren's Previous Appearance on CNBC
No immediate information was available McLaren.