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.The Fred Report - Mid Week Update July 10, 2013
We remain defensively positioned and would hold some cash in accounts, but new accounts that are primarily in cash should become invested over time. We still see less robust action over the next few months.
We continue to maintain defensive positions but be invested. We remain comfortable with our forecast that stocks should do less well in the second half, and do note that we continue to see signs of economic weakness around the world. Bonds are not responding well to positive indications on technical indicators, which suggests that the 30+-year bond bull market may be ending.
The Fred Report - Mid Week Update July 3, 2013The market should be up more during this holiday week – let’s see what happens Friday, but right now the indication is stocks down and bonds up on Friday’s jobs report. Gold continues to show small buying indications. Japan is improving and the FXY has broken below 100 and could test 95.The Fred Report - Weekly July 1, 2013Our most likely scenario is for the recent choppy, corrective behavior to continue, with a likely correction to the 140 – 150 area on SPY. Bonds are very oversold, and should rally.The Fred Report - Mid Week Update June 26, 2013
The SPY could close over 160 and depending on the indicators could still be negative. If bonds do not rally from this area, things could get worse quickly.
We remain defensive, and most subscribers were not bothered too much by last week as we have suggested implementing defensive maneuvers over the last month or so. A move below Friday’s lows would be a strong indication that a 9 – 12% correction from 160 is underway. The dollar may be set to do relatively well should bonds and stocks continue to fall together.
If this market moves below 160 on SPY, closing basis, we would become even more cautious. Aggressive advisors should add to PCY and PGX. Conditions appear right for a rally in Japanese equities at this time.
The Fred Report - Mid Week Update June 12, 2013Traders should be adding stocks, not because the market looks great, but because the risk is well defined (as we said, closes below 160 would be our benchmark). We remain long-term bond bears and would use a rally here to eliminate bond positions. Commodities continue to look like they are trading in a base, and we are seeing rally indications in Agriculture and Oil.The Fred Report - Weekly June 10, 2013This Weekly Report could be titled “The Benchmark Issue”. As long as SPY remains above 160 the market can continue to advance. Below 160 could be a problem. Bonds and TLT tried, and failed to rally above 117, and as long as it remains below that TLT is vulnerable. GLD also tested a key level (137) and failed to break through, so more downside is possible here.The Fred Report - Mid Week Update June 5, 2013Daily stochastics are coming down into the buying area on SPY. TLT needs to see more strength to get the daily stochastic up enough to be a confident buy signal.The Fred Report - Weekly June 3, 2013US stocks are at a critical juncture as several indicators are extremely oversold. Bonds had the drop forecasted last week, and look set up to rally back a bit. We continue to observe that economic data from around the world continue to show signs of slowing.The Fred Report - Mid Week Update May 30, 2013
A close below 36 for XLU would suggest additional weakness. Bonds look to have had the sharp shot to the downside, and could rebound here – although some choppiness over the next few days is to be expected.
The Fred Report - Weekly May 28, 2013The bottom line for this post holiday week is that we expect rally in US stocks into the end of the week, but would use this to complete defensive maneuvers. Bonds are set up to rally, but this is becoming acknowledged enough that we would like to see one more shot to the downside to actually set up the trade.The Fred Report - Mid Week Update May 22, 2013It looks to us like the down move in GLD is over, or very nearly so. FXY continues to look like a bottoming pattern.
