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.
The Fred Report - Weekly May 7, 2012
We continue to look for a test of the 134 – 132 area on SPY, and then a summer rally - and if this is going to work, this should be the start of that pullback. Accumulation models on bonds suggest the rally in TLT will end in the 120 area, and the next significant move will be to test, and possibly exceed, the 110 area support on the downside. GLD still looks like a bottoming formation will be completed above 165, and trading there would target 174, then 185.
The Fred Report - Mid Week Update May 2, 2012
Several have asked if we would be adding money at the juncture and the short answer is we would continue to wait until we see a close above 143 on SPY. The UUP had an outside day positive reversal, and it looks like the dollar could rally a bit.
The Fred Report - Weekly April 30, 2012
This is an interesting juncture because there are some short-term overbought indications, and very short-term sentiment is indicating a quick decline in advance of a potential summer rally. Bonds look dangerous to us. Stochastics and seasonality point to an imminent rally in gold.
The Fred Report - Mid Week Update April 25, 2012
Our target range for a correction has been 134 – 132, and at the lows of this move (around 136) are around 2.00 lower, not a significant amount. We still see more correction as likely, but don’t miss the forest from the trees – if we are wrong in here the market may simply rally from this area. TLT has filled the recent downside gap from a few days ago and weekly indicators suggest another advance could begin here, which should fail in the next few weeks.
The Fred Report - Weekly April 23, 2012
The stock market looks to continue the consolidation/pullback and move lower into the end of April, prior to setting up a summer rally. French elections make this an important week for Europe in addition to G-20/World Bank/IMF meetings.
The Fred Report - Mid Week Update April 18, 2012
We suggested adding some cash back in on Monday, and would add the rest above 143.50 on SPY. The dollar continues to look attractive overall. Gold is flat and still looks like a bottom is forming.
The Fred Report - Weekly April 16, 2012
Stocks have completed what we believe is the first segment of a larger correction, and daily stochastics have declined into the buy area on most indexes and sectors. Should SPY penetrate 143 significantly, our expectation of more correction will be proved incorrect, and should SPY move significantly below 132 a more significant top is being formed. TLT should decline slightly this week, and this would set up a rally in TLT over the next two weeks.
The Fred Report - Mid Week Update April 11, 2012
The markets may become choppy and difficult here, with some rallies and declines followed by a sharp move down into early May where we will likely see a good buy signal. GLD has held support and rallied as these things have occurred – suggesting that the head and shoulders bottoming pattern on the weekly charts we have been discussing over the last several weeks is still our preferred forecast.
The Fred Report - Weekly April 09, 2012
The likelihood of a test of the 134 – 132 area continues to increase the longer the market consolidates in this area without breaking out. The TLT has continued to hold the 110-area support, setting the stage for a rally attempt, which we believe will ultimately fail. We continue to see better performance in resource-based economies, some commodity inflation, and fewer problems than Asia and Europe.
The Fred Report - Mid Week Update April 4, 2012We continue to see a correction as long as SPY remains below the upper end of our projected range – 143. We are more concerned for our trading clients and not our investing clients – we think a pullback could test 132, which is not significant for most investors. Our preferred scenario is sort of sideways drift over the next couple of weeks – followed by a sharp drop into a May low, then a good rally. We would add to small and mid-cap names if SPY trades at 132.The Fred Report - Weekly April 02, 2012We expect some choppiness, and again mention that should the market correct small and mid will do worse – but should such a drop occur we would add small cap names to accounts. We would look at a couple of international bond ETFs that should perform well over the next few months as the currency markets and international developments stabilize. We have a new 12-month objective on GLD due to the close below 175. This target is 184.The Fred Report - Mid Week Update March 28, 2012SPY continues to trade in the 140 – 143 target area, and we continue to be a bit defensive until we see a solid move above the 143 area. There are no sell patterns on the indexes, and sentiment indicators are much better placed than the last time we were here – so we remain somewhat optimistic. A look at XLE and OIH suggests a partial decline in oil is possible into May.The Fred Report - Weekly March 26, 2012While it is possible that we see some end of quarter “window dressing” we would use strength to sell underperforming stocks, and assume a bit more defensive a posture. TLT could rally here, but the chart continues to deteriorate and we would use rallies to lighten up those positions. The European currencies look like basing patterns, while the Yen looks ready to rally in a downtrend.The Fred Report - Mid Week Update March 21, 2012
Sentiment indicators continue contrarian bullish tone, and while the market is overbought there are no sell patterns as of yet. GLD could be a head and shoulders bottom, as long as GLD can stay above 158.
The Fred Report - Weekly March 19, 2012
On SPY, we would be concerned short-term by two closes below 134, and believe this rally would be over below 129. Be alert for a sharp price advance in TLT from here that should ultimately fail. GLD (SPDR Gold Trust) has moved down into support and looks to rally from this area.
