The Fred Report - Weekly July 16, 2012This week is options expiration and as such could be a bit more volatile than usual. Stocks look poised to (finally) move to the upside. The accumulation models on bonds remain more attractive than stocks, which likely points to a “day of reckoning” later in the year.The Fred Report - Mid Week Update July 11, 2012We continue to suggest selling underperforming stocks, and otherwise getting portfolios in shape for a decline. Should the dollar move much through 84 for the DXY, it would tend to confirm a new up-leg for the buck and this could hurt both stocks and commodities.The Fred Report - Weekly July 9, 2012We expect 143 on SPY this summer but this is not that far away. Our interpretation of what the market is saying now is that, while momentum indicators remain bullish, as does seasonality, economic indicators area weakening enough to worry market participants, and they are taking steps to prepare for a decline. We continue to recommend Preferreds and Corporate bonds in the US market, rather than treasuries.The Fred Report - Mid Week Update July 5, 2012Stocks have finally broken out above the 136 area on SPY, and perhaps more important to our summer rally scenario is that the IWM, IJR, and MDY are participating in the rally as well. The case can certainly be made that small-caps are still outperforming large although that out performance has narrowed in recent weeks, and should the economy slow in the second half of the year the small caps may weaken.The Fred Report - Weekly July 2, 2012We should see the market up an additional 5% or so in two months. We still recommend using this strength to sell underperforming stocks, write calls, and otherwise be defensive, as the market may react badly to the next short-term overbought condition.The Fred Report - Mid Week Update June 27, 2012
Short-term indicators still suggest an up week, so we will go with that, but for those who are more interested in capital preservation than “shooting the lights out” on the upside, caution is indicated. Some quick commodity notes: Agriculture is starting to work, albeit a little late. Gold has made higher lows as the daily stochastic has moved back down into the buy area.
The Fred Report - Weekly June 25, 2012Conservative players should use strength this week, which we expect, to become a bit more defensive. Oil and the commodities in general seem to be pricing in at least a slowing economy, if not recession.The Fred Report - Mid Week Update June 20, 2012The movement in the Transports has been favorable and suggests our concerns about a weaker economy MIGHT be overblown. We expect higher prices, but feel there is a bit more risk here and if we are called away as SPY gets to the 139 – 140 area that would be fine.The Fred Report - Weekly June 18, 2012We anticipate this rally to continue and challenge the 137 area, where we will reevaluate things if this is in fact hit. We are seeing signs (bonds are one, copper – below – is another) that the US economy is weaker than many expect, and could weaken still further into the fall.The Fred Report - Mid Week Update June 13, 2012Should this "going aggressively nowhere" continue, and the market close relatively flat for the week (i.e. around 132 or 131), the chances of an advance starting in next week would go up. Key resistance areas are 133.60 and 135, above these would suggest some more upside as well. DBC, our favorite broad-based commodity ETF is holding around the key 24 to 25 support area and is oversold. A rally above 25.20 would suggest a test of 26.40 and then 28.The Fred Report - Weekly June 11, 2012Should the market rally here, it would be a sign that the bull is intact and things are somewhat better than sentiment would indicate. Bonds have held support but TLT could close below 125 on Monday. If this occurs, this market should trade back to the 120 area. We maintain our target of 184 for GLD in 9 months. The dollar has been pulling back and could test 81 in the next week.The Fred Report - Mid Week Update June 6, 2012SPY has tested down into the 127.50 area and basically held that support. Above 130.15 would be a plus suggesting a test of the 132 then 135 area is at least possible. We have had some questions about SLV and it looks buyable to us for at least a trade.The Fred Report - Weekly June 4, 2012Bottom line is when a surprising economic data point such as Friday’s job number causes a break of technical support further weakness usually is in the cards, and risk management is key now. Bonds have suggested an economy that is weakening more than expected, and this would seem to be confirmed by Friday’s weak economic data. The dollar has hit intermediate resistance and may reverse.The Fred Report - Mid Week Update May 31, 2012Wednesday's trading action seems to be part of a bottoming formation and we continue to look for a meaningful rally from this area. GLD has tested down into support once again and closed positive in a reversal day. We continue to expect a move to 184 this year, and a move below 147 would call that into question.The Fred Report - Weekly May 29, 2012The downside tests we saw suggest that stocks have found support and have likely started the forecasted summer rally. TLT has started to look like a short-term top is in place. Oil has come down more than expected, but is giving some indications that a rally should start.The Fred Report - Mid Week Update May 23, 2012We think the summer rally we have been looking for has started. We would be buying this market on weakness. DBA has had some pullback but looks to stabilize. We expect some better European news here in the next week despite fears of an imminent Greek default.The Fred Report - Weekly May 21, 2012
Stocks have come down into mid-May, as we have suggested they would, and while they have been a bit worse than expected, this should now lead to a summer rally. A commodity rally is still possible this summer, and it looks like DBA has started that rally. The Put/call ratio chart suggests the short-term backdrop for stocks is favorable.
The Fred Report - Mid Week Update May 16, 2012
We continue to expect a summer rally from this area. We do NOT think Financials will be a leader, and XLF remains an equal weight. Gold has fallen right into the support area we have been looking for at roughly 150. It should hold in here and rally after maybe a couple of choppy days of trading. Accumulation models suggest this could be the last week up for bonds, and one of the reasons we have been looking for a stock rally from this area has been our projection on weekly bonds.
The Fred Report - Weekly May 14, 2012
Trading could be choppy and difficult, and we would still like to see one more thrust to the downside, into our target area of 134 - 132, to complete the pattern. Accumulation models for the TLT remain weak during this rally, suggesting that a sharp decline is due. GLD has come down but the accumulation model is rising, so we expect a turn from this 150 area.
The Fred Report - Mid Week Update May 9, 2012
The market did a number of things we have wanted to see, principally break the lows of the consolidation, and snap back. We think this drop might continue a while longer, and go a bit lower. We will maintain our stance and wait to deploy the last bit of cash on moves to either 134 – 132, OR above 143.
