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.The Fred Report - Weekly March 11, 2013We note that stocks are close to our objective of 156 on SPY set several months ago. While we see higher prices, anyone with extremely risk adverse clients should consider some defensive action in honor of our arrival in this target zone. The recent down move in TLT leaves the door open to 110 or lower. Cocoa, Sugar, and Coffee are all down over the last several months, which indicates weak demand for these commodities and supports the possibility of a weaker second half to 2013.The Fred Report - Mid Week Update March 6, 2013A range from 21.70 – 22.75 is likely over the next few months for UUP the short run. We have been asked whether we would buy the stock, and we probably would not buy it if we were looking to outperform in the short run.The Fred Report - Weekly March 4, 2013Last week’s sharp declines were a bit of a surprise, but served to move daily stochastics down into the buy zone on most of the stock indexes. The bond market was especially interesting – and we may have seen a significant shift in favor of treasuries.The Fred Report - Mid Week Update February 27, 2013
Stocks have been weaker this week than we have expected, but daily stochastics are down and these markets looked poised to rally back into at least the first part of March. Switzerland is our favorite European investment. We would add money to this right away, while staying away from Spain and Italy.
We are close to our objective of 156 on SPY, and while we continue to like the way things are trading should the market fail to accelerate we would have concerns. Gold is at a particularly interesting juncture here as it may be making a short-term bottom. FXE has weakened enough to have a small snap back rally, but the real action should occur in FXY.
Our target for this move remains 156 and we may reduce exposure at that time. Short-term indicators on GLD suggest a bounce is quite close – how far it carries, or how it fails, will tell us a lot. USO has started to decline as expected now that the seasonally strong period is over and it could test all the way back to 31 or even break the recent low.
This consolidation could end this week, with some upside acceleration that could serve as a spur to get some of the money still on the sidelines into stocks. GLD continues to have support at the 160 area, and a close above 164.50 would be a positive and suggest a move to our forecast 179 is underway. Part of our forecast that EEM will do well this year is based on analysis of Asian markets in general and China in particular.
The rest of the week could be choppy but up – no changes in opinions, and this market could close on the highs for the week. We should see some upward movement in GLD and above 165 would be strong and suggest our objective of 179 is on the way to being achieved.
An intermediate top is likely weeks and very likely months, away. Bonds are looking precarious, as TLT has broken support. Oil may weaken in the spring.
