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The Fred Report - Mid Week Update April 20, 2011

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author/source: Fred Meissner, CMT


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The FRED Report – Financial Research, Education & Data

Mid Week Update

 

Volume 3, Issue 32

April 20, 2011

 

Download PDF Version here


Update of Market View

The stock market has acted a bit worse than we thought it would early in the week, at least so far this week, but it is acting in line with our larger forecast of a correction. Should this correction unfold as expected, it will be choppy and difficult to trade. This will give the bulls hope, at least until the end of the move. As we have mentioned, should we be correct in our forecast, the end of the move will be much more volatile than the beginning.
We have been asked if we believe that the S&P 500 has made a double top, and if this is the end of the move up from the March of 2009 lows. So far, our answer to that is no, and we will give the reasons for that answer and show charts to support it on this page and the next.
Our first thought is that the SPX has been misleading ever since the 2000 highs. In 2007, it is the only index that double topped – all of the other major indexes moved above their 2000 highs at that time. We wrote a research piece on this; “Secular Bear may be Bull” that is featured in the “Special Research Articles” section of the website. As occurred then, most of the indexes have now made new highs for the move, and in the case of IWM and MDY, new all time highs. On this page, we show monthly charts of the Dow Industrials and Dow Transports. Readers can see that the Transports are outperforming, overall, a positive for the intermediate term. On the second page, we show Monthly charts of the SPY, MDY, and IWM. Compare the position of the market now and late 2003 to early 2004 – we had a correction, but higher prices ensued, and that is what we think will happen this time as well.  

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Other Points of Interest

We show charts of the XLV, BBH, and PPH. Healthcare has improved substantially over the last few weeks and the most attractive subgroup within healthcare is Biotech. Drugs are starting to improve as well. Healthcare may also be starting to act as a defensive trade for many. As the market is slowly correcting and this sector is advancing.

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DISCLAIMER: 
Fred Meissner is primarily responsible for the research in this report and certifies that: (1) all of the views expressed in this research accurately reflect his personal views about any and all of the subject securities or issuers; and (2) no part of his compensation was, is, or will be directly or indirectly related to the specific recommendations or view expressed him in this research.
 
This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report.  Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information.  The information in this report has been obtained or derived from sources believed by Fredco Holdings, Inc. to be reliable, but Fredco Holdings, Inc. does not represent that this information is accurate or complete.  Any opinions or estimates contained in this report represent the judgment of Fredco Holdings, Inc.  at this time and are subject to change without notice.  Fredco Holdings, Inc.  or its employees, officers, directors, principals, agents, affiliates or adviser may from time to time provide advice with respect to, acquire, short sell, hold or sell a position in, the securities or instruments named or described in this report.
 
Fredco Holdings, Inc. does not have investment banking relationships with any of the companies mentioned in this report and does not conduct investment banking business, in general.  Fredco Holdings, Inc.  and its employees do not receive compensation of any kind from any of the companies in this report.  Fredco Holdings, Inc. , its directors,  officers, principals, agents, advisers, affiliates and employees may maintain a financial position in the securities mentioned in this report, provided however that no buying or selling  activity will be taken with respect to a security referenced in a report by such parties within three days of such report’s publication.
 
The information contained herein was prepared by Fredco Holdings, Inc., which is solely responsible for the contents of this report.
 
Copyright 2010-2019 Fredco Holdings, Inc..  All rights reserved. This report is a publication of Fredco Holdings, Inc.  located at 4514 Chamblee-Dunwoody Rd, Suite 112, Dunwoody, GA 30338. 

 

 

 

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