The Fred Report - Mid Week Update November 13, 2013we would use this weakness in GLD to add some positions. We have had a price target of 34 on USO for some time, and would take a preliminary position now, with more to follow on some strength.The Fred Report - Weekly November 11, 2013For advisors holding an excess of cash (we have been advocating 20%), or getting in new accounts, we would add money to large cap growth rather than value, and in Industrials and that sort of stock rather than consumer names. The insipid nature of the bond rally in October suggests that there may signify the beginning of a real bond bear that carries longer than people expect.The Fred Report - Mid Week Update November 6, 2013
We are suggesting adding money to large cap, while moving away from aggressive over weights in small cap. If rates move up more than anticipated, bond ETFs will be difficult to make money in, but several that might work well in 2014 are: CWB, BKLN, DSUM, and BWX.
Several advisors have asked if this is the most overbought market we have seen – it is not. Closing the month here, and then an up or mostly flat November, would be needed to put price oscillators where they were in 2007, 1997 – 1998 and other super overbought periods. Our buy signal ends in October, and unless TLT can make it above 110 by Thursday’s close the odds of a bear market in bonds go up, and traders should either close out positions or substantially tighten stops.
Our forecast has been for this week to be down and we still think this can occur. TLT has done reasonably well this month but should do better still and we can see a test of the 110 area as being possible by the end of the week.
TLT closed above the key 107.50 area and 109 then 113 remain possible before this move ends. While stocks are acting better than we have expected, drifting down this week would set up more corrective behavior next week.
The Fred Report - Weekly October 21, 2013Short-term indicators are overbought, and condition indicators suggest a neutral to defensive position is warranted. TLT still has targets in the 110 – 114 area assuming 107.50 is penetrated to the upside.The Fred Report - Mid Week Update October 16, 2013Bearish sentiment is low in the 20% Bears range, rather than in the 27% range. This is a negative. Our forecast remains that the market should dip in October before some rally at year end.The Fred Report - Weekly October 14, 2013Since last week's rebound has resolved the short-term oversold condition, we continue to see a real possibility of exceeding the recent low before the month is out. While we continue to believe there can be some bond rally this month and next, in reality the anemic trading suggests that the 30-year bear in bonds that we fear has started.The Fred Report - Mid Week Update October 9, 2013Stocks have continued to pull back and closed below the key 166 area on Tuesday. This opens the door to lower prices and a test of the 162 – 160 area looks likely. TNX still has some room and could still test the 23 area but this is happening slower than we would like to see, and there is a lot of support at the 26 – 25.50 area, below. Coal is actually weaker than oil and the chart is avoid for now.The Fred Report - Weekly October 7, 2013We discuss the stock indexes and the key support level at 166. A break of this would suggest lower prices, and while we expect his prices have been resilient enough to continue dollar cost averaging into stocks. Those adding money here should consider adding to QQQ, IYW, or PSCT, as technology looks positive.The Fred Report - Mid Week Update October 2, 2013
We have no change to our forecast on stocks and bonds. We remain bullish on Gold as long as the lows in the 115 area on GLD are not exceeded and would add positions slowly in this area. We continue to think t is a base above a base with a target of 540 or so.
The Fred Report - Weekly September 30, 2013We feel comfortable with our forecast of a drop in October and a rally back for the end of 2013. The three ETFs that interest us for bonds in 2014 are BWX, CWB, and PCY.The Fred Report - Mid Week Update September 25, 2013We have had an up September, at least so far, and this means (as we mentioned at the beginning of September) that October is high-risk month that should be down. We remain on a strong buy signal, on a technical basis, in the interest rate market.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.
