The Fred Report - Mid Week Update February 9, 2022

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The FRED Report – Financial Research, Education & Data    

Mid Week Update  

Volume 14, Issue 11
February 9, 2022

Download PDF Version here


Update of Market View

Stocks rallied on Tuesday after weakness on Monday, in-line with expectations. We continue to look for a move on SPY (SPDR® S&P 500 Trust) to the 458 to 462 level. For those who want to buy put options, that area is where we would start to establish a position. Since we think, if we are correct, that the market can come down into the end of the second quarter, we would buy a combination of March and June put options. We think that this upside level could be tested by the end of this week. If you are looking to rebalance portfolios from Growth to Value, we would do so when those numbers are hit.

We continue to have questions on GLD (SPDR® Gold Trust). Nothing has changed for us in terms of the Accumulation Models – GLD still looks risky. However, we note that there is a daily stochastic recycle on GLD, meaning that if you want to buy this, the rules say it is ok. Our big concern is that GLD advances on stochastic recycles, but then falls quickly when overbought – which is a function of negative accumulation. Unless this can get above 172.50, we would not hold it for very long.

weekly_midweek_020922 weekly_midweek_020922

Other Points of Interest 

We will look at another idea for trading gold. This is OUNZ (Van Eck Merk Gold Trust). This is a much thinner ETF, but has a key difference with GLD. It follows the physical price of gold and allows you to redeem shares for gold bars or coins. The Net Asset Value (NAV) is set by the London PM fix so the NAV can be stale over here in the US. It has support at 16.75 to 17, and resistance is 18.50 to 19. The Stochastic pattern is identical to GLD. We show daily and weekly charts, below.

weekly_midweek_020922 weekly_midweek_020922


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