We have targets of 203 – 209 on SPY and these could be tested in September. If they are, then we would take some defensive steps. We have raised short-term trading stops on TLT to 117, although traders may continue to want to use 114.
We look at Technology, which is doing better now and may broaden out a bit more in the fourth quarter. As far as Latin American contribution to EEM is concerned, the charts of these markets have improved since we last looked at them, and there is reason to believe that they will contribute to (or at least not aggressively impede) a rally.
PDP, the high relative strength ETF is now slightly outperforming SPY showing a market that may be starting to trend a bit. We should now use 43 on EEM as a stop for positions we take in this market – and we should take, or add to positions at this time.
The Fred Report - Weekly August 18, 2014This week is setting up to be important as it is likely that the market will attempt to move above resistance or down through support this week or next. For traders we will move our benchmark from 110 to 114 on TLT, leaving it at 110 for investors. The Fred Report - Mid Week Update August 13, 2014We have been asked several questions about Europe, especially Germany and are there good substitutes for this chart on EWG? My initial inclination was to say no, but actually there could be some tax selling in this name in September/October so taking a tax loss now and substituting another European ETF may be a good idea if you own EWG.The Fred Report - Weekly August 11, 2014
We would expect more of a rally here and a possible test of the 196 – 198 area on SPY, and failure to exceed that area would be a negative. We remain bullish on GLD, but the performance of gold does not really have economic significance. Should EEM exceed 45 again, on this run, and accelerate, we could see the start of a big move.
Stocks are down again early this week, but remain in “no man’s land” and we actually like the action. We would actually add a little money to PRFZ or some of the other small and mid-cap indexes for those who want to put money to work.
We confess to nagging concerns about a slower than expected economy. We are very curious to (a) see the GDP numbers, and (b) the various markets reaction to them.
The Fred Report - Weekly July 28, 2014Our FPOs on Small and Mid-Cap ETFs suggest they may rally sharply into the end of the month. TLT is breaking out above the 115.50 area resistance and another close above this area targets 117 to 120. We have reached an interesting juncture in both UNG and UGA suggesting that short-term bounces could occur from this general area.The Fred Report - Mid Week Update July 23, 2014EEM is fast approaching the 45-area breakout point. Should this occur, we could see big moves up in that index.The Fred Report - Weekly July 21, 2014
We think the reason for this corrective behavior is the weak economy forecast in the beginning of the year, and if we see improvement in the second half IWM should improve a bit but may bet setting up for another run in 2015. As for the end of July, we expect to see the market rally a bit more and by early August we should test the 203 area on SPY forecast at the beginning of 2014. Given the overall sentiment in gold, these patterns plus the fact that my accumulation models on gold are very close to two-year highs, keeps me very excited about prospects for the metals.
Biotechs via IBB are coming down again and should hit 247 and possibly 233. GLD is buyable at 123, 122, and 120 if it can get to those numbers.
The Fred Report - Weekly July 14, 2014Overall we would expect slightly better performance from growth versus value for the second part of the year. We are looking for tech to settle back a bit over the next few weeks, and then rally again in the fourth quarter.The Fred Report - Mid Week Update July 9, 2014SPY has an overbought daily stochastic and as such can chop around for a bit but as long as 190 holds on SPY the market is fine although it could test 192 - 193.The Fred Report - Weekly July 7, 2014
The improvement in Put/Call, if it continues, does suggest some continuation of this summer rally. TLT has completely filled the gap at 110.54, and even traded below it. Closing below this area could imply rising rates for the remainder of 2014 and possibly an end to the bond bull market.
The model on IYT is suggesting this index could pause or even weaken, especially relative to other indexes, in the second haft of 2014. The patterns on both DBA and JJA are negative enough to suggest sale of these units immediately, but certainly on moves below DBA 27.20, and JJA 49.60.
A bit of back-off and chop after hitting the 11,000 area on NYA is not a surprise. We could still have a fairly strong close to the quarter. TLT has held support and turns up but remains in no-man’s-land unless it can start to make new highs on this run.
