The Fred Report - Weekly May 20, 2013We do not see any reason to change our forecast that equities will do less well in the second half of 2013. Bonds are showing some bottoming signs, but they may not be ready to rally just yet – it could be a week or so away. Accumulation models on DBC continue to look attractive, and we would use near term weakness to add to or start a position in DBC.The Fred Report - Mid Week Update May 15, 2013We advocate taking some defensive measures in advance of a quicker than normal decline. We continue to expect that gold will retest the old lows before a significant rally. We continue to expect a strong summer in Agriculture.The Fred Report - Weekly May 13, 2013Stocks have continued their rally, but sentiment indicators continue to weaken and the market is overbought. The seasonal time for a rally in agricultural area is approaching.The Fred Report - Mid Week Update May 8, 2013We advocate moving into a more defensive position on this run higher. A move on SPY below 157 would be a concern and sign this rally is running into trouble.The Fred Report - Weekly May 6, 2013
The message from the equity markets right now is that a caution flag is out. Our forecast has been for a stronger second half in bonds and we still agree with this.
The Fred Report - Mid Week Update May 1, 2013Our sentiment model went negative as of today's % Bears reading, making our first sell signal since April 15, 2011. Oil has started to pull back a bit right here, and this could continue into May, but ultimately we still expect a rally from mid to late May until August.The Fred Report - Weekly April 29, 2013We would use strength over the next few days to add to covered call positions, and take other defensive measures. For the first time since the Japanese Yen hit 105, there are bottoming signs on FXY, and it could rally to the 103 – 105 area.The Fred Report - Mid Week Update April 24, 2013EEM has started to rally as well, and is below the 44.50 resistance we mentioned, suggesting some higher prices over the next few days. TLT staged a reversal and we would watch the downside targets for all the bonds we gave in the weekly review – they could be hit, and we would want to add to these for traders. GLD’s daily stochastic has just moved above 20, suggesting more rally is likely, but the next set of readings above 80 should lead to a retest of the recent low, that should be successful and bought.The Fred Report - Weekly April 22, 2013This is a particularly difficult place in the stock market – certainly more upside could occur, but the risk of decline over the next few weeks is quite high. We continue to believe that bonds will be a better hedge against a stock market decline than commodities, because of our concern that any market decline will be caused by a slowing economy and the perception that a recession is near.The Fred Report - Mid Week Update April 17, 2013Sentiment indicators and this upsurge in volatility combined with weakness in small and mid cap stocks and the transportations, suggest a more cautious stance. A move below 152 on SPY would be cause for concern. Indicators for Gold are oversold enough so that we should now rally, but again as mentioned we expect a double and not a “V” bottom.The Fred Report - Weekly April 15, 2013The stock market has continued to trade well but we continue to see some signs of economic slowing and this has started to be reflected in market action. Should these signs of an economic slowdown continue, bond markets could rally and stocks may very well pause, or even take a tumble.The Fred Report - Mid Week Update April 10, 2013Stocks have been trading well so far this week, and it looks as if we could see SPY at 159 – 161 relatively soon, i.e. by next week or so. I would add Oil slowly in here with the idea that we have full positions at the end of May.The Fred Report - Weekly April 8, 2013Last week’s choppy decline probably qualifies as the second decline of the three we have been looking for before a real correction. It also looks as if our idea of a slowing economy may be correct, in which case bonds will do well in the second half. It looks to us like oil prices might trade in a range between now and May, but with some downward pressure.The Fred Report - Mid Week Update April 3, 2013
Our reason for more caution now is some overbought readings on longer-term indicators – and not signs of a major top or intermediate correction, at least not yet. EWH remains the most attractive China ETF on a technical basis – and we would use this as long as EEM remains above 42 – 41.
The Fred Report - Weekly April 1, 2013Stocks rallied last week, into the end of the quarter, and longer-term indicators are starting to show some clouds on the horizon. For longer-term investors, DBC may be an interesting idea at this juncture, because the weekly stochastic has developed a buying formation.The Fred Report - Mid Week Update March 27, 2013After a slow start to the week, it looks as if stocks are going to move up into the end of the quarter which is Thursday. Bonds look like the best hedge in the event of a market correction, and not gold.The Fred Report - Weekly March 25, 2013US stocks appear poised to resume their uptrend through the end of the quarter, but after that we are not so sure. What makes copper so important is that it is often considered to be a harbinger of economic strength or weakness – and right now it is weak enough to suggest a weakening economy in the second part of 2013. Accumulation models suggest AAPL is not going to make a big move up but rather will base. Projected range is about 420 – 470.The Fred Report - Mid Week Update March 20, 2013There is no change in our US market view, except to note that stocks are showing a lot of resilience. Examination of the European bonds (per the Weekly Review) suggests that Europe should be bought on this turmoil.The Fred Report - Weekly March 18, 2013Areas SPY could test are 152 and 150.50 and we would add at those levels. A break of 148 on GLD would be a major concern, and a move above 161 on GLD would target 164 and then back to the 170’s. European news could have more than just a one day effect.The Fred Report - Mid Week Update March 13, 2013In the weekly, we mentioned that we would tend to look for a weaker close to the week if the beginning of the week was up, and we do expect some pullback (likely expiration related). A move by FXI below 37 would most likely invalidate our idea of an immediate rally in China.
