The Fred Report - Mid Week Update April 16, 2025

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The FRED Report – Financial Research, Education & Data    

Mid Week Update  

Volume 17, Issue 28
April 16, 2025

Download PDF Version here

Update of Market View

We are happy to see the markets settling down a bit, especially since we are at a couple of “Celebrations of Life” and also trying to take a day or two of personal time! Often the market goes “wubba wubba” when I leave town! Some sideways trading would be positive here, and within that context we could see a test of the 510-area on SPY (SPDR® S&P 500 Trust). A slight down close on the week would set up a strong up week next week. NOTE: Options expiration is interesting this week, as the market is closed on Good Friday. This means expiration is actually this Thursday so how this is going to affect our forecast is unknown. Geoff notes that we have seen a big drop in premium as the VIX retreated to under 30 yesterday before a close just above 30.

We have been asked about Small Cap, specifically whether we it is a buy, hold, or sell here. We are going to go out on a limb here, and suggest that it is a hold, or even a buy. We say this because Accumulation is still favorable and the monthly stochastic is close to a buy recycle. However, we would not use the traditional IJR (iShares® Small Cap 600) or IWM (iShares® Russell 2000 Index). Rather, we would use VBR (Vanguard Small Cap Value ETF), which we have discussed on various conference calls over the last few months. If you have positions in the other two, and you want to add to these we would still use VBR, as it is a better chart. It is a daily stochastic recycle, and the weekly is almost recycled. More important – it is showing relative strength vs. the other two units. It has support from 160 to 150. We show monthly charts of these three, below.  

Other Points of Interest 

We show a chart of ISD (Prudential Short Duration High Yield). We have had some questions on this. It is trading relatively well given the bond market, and the yield is attractive. It is buyable as there is a daily buy recycle. The bond market is choppy right now, but we can still see a rally into summer.