Stocks have likely started a Thanksgiving rally, and it has the appearance of broadening out, but once again we had a negative weekly advance decline line. TLT is trading in a desultory way, and we remain with our view that bonds have peaked, and rates have bottomed, for a while.
One of our favorite sectors, Healthcare, is trading well and should continue to lead. For MOO, above 58 targets 65 and this should test 57 – 58 even if it fails to break out.
The Fred Report - Weekly November 17, 2014Stocks have hit our main target of 203 on SPY for 2014, but our timing models are already in defensive mode so we are in no rush to make changes to models. Agriculture looks buyable and may be a good seasonal trade. USO had an inside week, often a suggestion of a trend change.The Fred Report - Mid Week Update November 12, 2014Stocks continue to rally but we are not seeing the kind of advance in smaller cap issues we hoped to see given formations on the NASDAQ advance decline line. DBA continues to show bottoming signs and this is a favorable seasonal period for Agriculture.The Fred Report - Weekly November 10, 2014
The market is moving up the capitalization scale and to be successful we should move with it. This should not affect the QQQ directly as that is actually a large cap index in many respects, but it may affect individual, smaller stocks – watch out for value traps. There are some more bottoming signs in the petroleum complex.
The Fred Report - Mid Week Update November 5, 2014We note that many articles have crossed our desk that let us know that as soon as the mid-terms are over the market will embark on the strongest rally of the last few years – and have concerns that we see a bit more choppiness before a real rally occurs. Unless GLD posts two closes above 116 it is still a breakdown.The Fred Report - Weekly November 3, 2014We would treat this as a narrowing market and put money into lower volatility, higher yielding names. USO and UNG have held support into the seasonal buy period, and are oversold enough to start the seasonal advance.The Fred Report - Mid Week Update October 29, 2014Stocks continue to advance, and are trading better than we thought they might, but there are still issues with broad market underperformance. We have no changes in oil, gold or bonds except to note oil is trading well given the proximity to October expiration, and TLT below 117 targets 110.The Fred Report - Weekly October 27, 2014Accumulation models on SPY, MDY, and IJR continue to lag price. For now the message of the market seems clear enough – if you are going to add money use large cap defensive stocks, or ETFs like SPLV, SPHD, or DVY.The Fred Report - Mid Week Update October 22, 2014
The risk is a flashy up open that trades down throughout the day and as traders we would sell an up open. Momentum indicators continue to suggest a retest of the low or even lower closing lows. GLD has traded up through 120 and if this holds the next test should be 122 – 123, above this is clear sailing.
The Fred Report - Weekly October 20, 2014SPY bounced at the end of the week, but accumulation models took a big hit and, along with bonds, suggested that some fairly heaving selling occurred that was not counterbalanced by buying at the end of the week. We would not sell Emerging Markets or Japan.The Fred Report - Mid Week Update October 15, 2014We have moved to a more defensive position in models A failing rally to 192 – 194 would be a concern. XLE is right on long-term support. A move back above 82 would suggest a bounce is due. The Fred Report - Weekly October 13, 2014
U.S. stocks have continued to weaken and are now testing the 190-area support on SPY. Indicators continue to deteriorate and we have concerns that this market could correct further.
Traders who add in this area should be ready to take defensive measures below 190 as we believe risk is to 176 – 170 with the January lows a possibility on SPY. TLT has held support and could challenge the 120 area again, or even exceed it.
The Fred Report - Weekly October 6, 2014We believe fear of economic weakness in Europe is a strong driver of recent equity and currency market volatility and European ETFs are in an interesting position. Aggressive advisors should consider adding something in the Small Cap area, using a stop below 100 on UJR OR SPY trades below 190.The Fred Report - Mid Week Update October 1, 2014Monthly FPO’s on stocks have patterns such that our defensive stance is warranted and should continue for a bit. Bonds are looking a bit better as HYG was up Tuesday to end the quarter, and we need a bit more time to analyze the “Bill Gross effect”.The Fred Report - Weekly September 29, 2014
We have seen interesting news last week, with a lot of discussion of an “Alibaba top” which suggests at least some rally into the end of the quarter and possibly an up week. Gold continues to be of interest and while the trading is choppy we continue to see bottoming signs in this area, with Thursday being particularly interesting and positive.
Our benchmarks of SPY 194 and especially 190 on SPY should hold. The question is will the weekly stochastic on GLD turn up from this area. We believe it will, and that lows in the 115-area will hold.
The Fred Report - Weekly September 22, 2014Our concerns about a short-term top in stocks on expiration and the Alibaba offering remain – as we are in an area where short-term problems could arise, and some formations that suggest a pause is likely. Bonds rallied last week as forecast but the nature of the rally suggests a bit more of a trading range than a big up-move coming.
