The Fred Report - Weekly September 23, 2013We remain concerned that a strong September will lead to a weaker than expected October. Our fears that a major bear market in bonds is or has started remain. Areas that could be tested are 124 – 126 on GLD, and we would look to add at those levels. We continue to like gold but the next few weeks could see volatility.The Fred Report - Mid Week Update September 18, 2013The combination of Fed announcements and options expiration make very short-term prediction difficult, so we stand with our forecast in the weekly: up at the beginning of the week, and down at the end. Perhaps most important, bonds continue to act better than most expect, and the big surprise could be a rally on the Fed news.The Fred Report - Weekly September 16, 2013We still have outstanding price projections on SPY around 176, and believe that if this area is going to be tested, this rally should get under way this week. It would appear that the sentiment backdrop may be factoring this week’s bond news, and the reaction to the news could surprise the market, at least from a sentiment standpoint. Gold moved lower and challenged the 126 area looked for in prior letters. It looks to have made a spike bottom, and advisors should start to add GLD to portfolios at this time.The Fred Report - Mid Week Update September 11, 2013Stocks are rallying through the first part of September as forecast and an up September looks to be a problem for October, which should be a down month if this continues. Stocks removed from the Dow tend to outperform once removed, on a one to two year basis. USO can go back to 33 to 34 easily and a break of 37.60 would imply this should occur.The Fred Report - Weekly September 9, 2013
We still believe the market will close at these levels at the end of the year, but are comfortable holding cash for now, with the idea of deploying it lower down between now and the end of 2013. The first part of the week for TLT may be down, but any new closing low on TLT that is revalidated would be a strong trading buy.
The Fred Report - Weekly September 3, 2013We still feel comfortable with our forecast that the second half of 2013 is going to be less robust than the first. Unless TLT moves quickly above 106.80, a test of 104.30 is possible and would be a great opportunity to buy this for a rally.The Fred Report - Mid Week Update August 28, 2013We remain intermediate-term defensive in portfolios, and are still comfortable with our November 2012 forecast that the first half of 2013 will be stronger than the second. We remain long-term bond bears, but could see one heck of a trading rally in these. We would use current strength to sell oil and put this money into natural gas by Friday.The Fred Report - Weekly August 26, 2013This week should be seasonally strong, and we would use strength to write calls and eliminate underperforming positions. We are advocating utilization of rallies to sell risky bonds on, and move into less risky fixed income.The Fred Report - Mid Week Update August 21, 2013
Indicators are oversold enough for a tradable rally. We remain defensive intermediate-term. Should TNX move up again, and make new highs, that would be a powerful sign that this buy signal on bonds is going to fail. It appears that FXY should slowly rise to attack the 105 area as forecast.
The Fred Report - Weekly August 19, 2013US stocks are quite oversold and should rally, but concerns remain about longer-term overbought conditions and sentiment. Bond prices should move up immediately, this week, from this area. Should this occur, we still have targets in the 23.20 or 23.30 area on TNX.The Fred Report - Mid Week Update August 14, 2013We would like to see this market show some “get up and go” but it has to happen relatively soon, or we should see some corrective behavior. There is a chance for a bond rally but so far the reaction to this signal suggests the bond bull market of the last 30 years has either breathed its last, or is about to. GLD still could test the 122 area within the context of this bottoming process but it DOES look like a bottoming process.The Fred Report - Weekly August 12, 2013The market is still holding support and summer rally targets remain, but we continue to be defensive as sentiment indicators suggest this rally is “long in the tooth”. This is such an interesting juncture for bonds, because if this bond buy signal we have fails, or the rally is insipid, it would be additional confirmation that our big fear in this market is occurring (and this is that the end of the 30 year bond bull market is upon us).The Fred Report - Mid Week Update August 7, 2013
SPY has tested, and so far held, very short-term support at 169. As long as this holds the short-term trend is up – below that paves the way for 167.50 and below THAT suggests weakness into September. Unless bonds rally we again iterate concerns that things could be worse in the interest rate markets than people believe.
PCY has been in our Bucket List Bond portfolio, and is a favored way to invest in emerging market debt. The fact that the smaller Japanese ETFs have so far remained above their support points is a long-term positive for Japan.
The Fred Report - Weekly July 29, 2013For those leaving for some vacation, the market should be fine for another week or so, but Monthly FPO’s are now in dangerous territory. The dollar also looks to strengthen after this burst of short-term strength in the FXY and FXE. Since the low, on May 22nd, FXY has been consolidating but with an upward bias, and it now appears that a test of the highs in the 104 area should occur in the next month or so.The Fred Report - Mid Week Update July 24, 2013
SPY closed at 163.45, suggesting a move to our 176-area trading target is at least possible. We maintain our objective of 165 at the end of 2013. We have had some questions about GLD. We reiterate that this market has had a 50% pullback of the up-move from the 2001 lows, and very likely has made a long-term invest-able bottom.
The Fred Report - Weekly July 22, 2013Stocks rallied a bit last week, and we are starting to see divergences on some of the momentum indicators – nothing horribly severe but enough to confirm a cautious stance. The Oil market has been very favorable to us this year, but prices are now overbought enough to suggest an imminent correction and we will scale back some of our oil positions.The Fred Report - Mid Week Update July 17, 2013
The action in stocks is about as expected, and we continue to maintain a defensive stance. Oil has exceeded price targets but remains up into the end of August on a seasonal basis.
The Fred Report - Weekly July 15, 2013For those who want to be aggressive and trade, we believe SPY could get to 176.13 very quickly and then reverse. We discuss the TNX and note the surprise here may be higher rates, and sooner, than pundits expect. The dollar is looking longer-term like a significant bottom is in place, there could be short-term corrective behavior in store.
