The Fred Report - Mid Week Update January 5, 2012
The markets have started the year off with a “bang”. Tuesday’s gap up is a start at breaking us out of the inverse Head and Shoulders. We would tend to be just a tad cautious until intermediate resistance on the broader indexes. Those numbers are 7900 on NYA and 76 on IWM.
The Fred Report - Weekly January 3, 2012
The Stock indexes have formed Head and Shoulders bottoms – all we need is more strength, at least in the case of the Dow and Dow Transports, to resolve these to the upside. Bonds are overbought and accumulation models are deteriorating – we remain cautious here especially in the case of US treasuries. USO (United States Oil Fund) is right up to resistance, but continues with favorable patterns, especially on a move above 40.50.
The Fred Report - Mid Week Update December 29, 2011
It is looking more like our scenario of a down week followed by a positive January could work out. Small and mid-cap indexes both made all-time highs in 2011, as did the Russell 2000, which is a bullish indication longer-term.
The Fred Report - Weekly December 27, 2011
This holiday week has got favorable seasonality for stocks – but traders should be cautious as it looks like it could be a down week. For the first time in a year, our TLT accumulation model is beginning to look vulnerable, suggesting bonds in general may be at a turning point in 2012. We have a short-term, but aggressive, buy signal on UNG (US Natural Gas ETF) here that has developed over the last few weeks.
The Fred Report - Mid Week Update December 21, 2011
A Head and Shoulders within a Head and Shoulders has occurred before, and has bullish implications. The neckline on both patterns is the same – 127.50 to 130 on SPY, 7900 roughly on NYA, 75 to 77.50 on IWM, and 165 to 168 on the MDY. Should these areas be exceeded the reward could be 12% or more. Should the areas of resistence be exceeded (NYA 7700 – 8000, IWM 77 – 78, MDY 168 or so) it would be another strong indication that the market is going to have a strong first half of 2012.
The Fred Report - Weekly December 19, 2011
We continue to see the market slow down in preparation for the holiday, and expect to see more of that this week. Bonds could trend up a bit more, but are overbought enough, and with sentiment where it is, a sharp drop could occur at any time. Our favorite international area is still Latin America.
The Fred Report - Mid Week Update December 14, 2011
We still think that more of the gap in the 120 – 122 area can fill, but today’s move down to SPY (SPDR S&P 500 Trust) 122.45 may have been enough. The dollar has continued the advance, and we maintain objectives of 82.50 – 84 on the dollar index.
The Fred Report - Weekly December 12, 2011
The market should make a try for the upside, and we can see a test of the 128 area on SPY, but this may also fail and the week close out flat once again. Advisors looking for a bit of international exposure that is not related to Europe can use EEB, EWZ, and to a lesser extent FXI.
The Fred Report - Mid Week Update December 7, 2011
Stocks have continued to move higher this week, and have approached, but not yet challenged, the key resistance areas we have been observing (IWM 77 – 78, NYA 7700 – 8000, MDY 168 or so). What we would like to see to generate some more bullishness – is a pullback to the 122 area or so, followed by moving through the aforementioned resistance areas. Gold has held support and started to rally – above 177 on GLD would be strong and we expect at least a test of that area before the end of the year. Commodities as represented by DBC are continuing to improve within a basing pattern – we would use dips to add in here.
Last week’s rally did not look great on accumulation models, and while we think the market can move higher here, over the very short-term especially, it is quite likely prices fall just a bit to close in the 121 to 122 area on SPY for the year, in line with our forecast. Bonds continue to trade opposite stocks, and from the standpoint of their accumulation models look surprisingly better than equities. Seasonally oil, and then the metals, tends to work the best into the winter months.
The Fred Report - Mid Week Update November 30, 2011
Monday’s challenge of the 121 area has filled an upside and we still look for the market to test 122 – 123, where we will then see if the market has what it takes to rally into the end of the year. Right now, our preferred scenario is a rally up to the main resistance (8000 on NYA), followed by a slow pullback for a close to the year around 1220 on SPX.
The Fred Report - Weekly November 28, 2011
Short-term indicators support a pretty decent rally here. Indeed, a test of the 122 – 123 area seems likely. Bonds are forecasting a “surprise” fundamental event that trumps the technical condition of the stock market. There is a seasonal tendency for agricultural commodities to drop at this time. Big Energy will outperform the market into the end of the year.
The Fred Report - Mid Week Update November 22, 2011
Stocks have failed at these levels and have done worse than expected – penetrating the 120 area on SPY. Prices have moved down to oversold on daily indicators, but have just started to turn down on weekly indicators. Our most likely scenario is the following, the market drops a bit more this week but basically goes dead and then we mount a rally attempt over the next couple of weeks into mid-December.
We still think that there is a good chance that the market will have a good up close this week. TLT continues to hold on in here and we hope that it starts to fall off later in the week. US domestic banks are better off than people think, and that as European fears subside there could be a rally in all banks.
We expect an up week this week, but since it is options expiration it could be choppy and hard to forecast. This week seems pivotal for TLT – right now our best guess is that we embark on a sharp decline that lasts through the week and retests the 112 – 110 area – a gap and also support. It looks as if the seasonal rally in the energy complex has started.
The Fred Report - Mid Week Update November 9, 2011
We note relatively favorable short-term patterns on the major indexes. Our real concern would be a quick shift in sentiment to the bullish side. The weekly SLV chat has broken the intermediate uptrend, but the stochastic has gone below, and then above 20, a “classic” buy signal.
The Fred Report - Weekly November 7, 2011
We still expect a challenge of the 2011 highs by yearend. Tech and Energy remain favorite sectors. Our forecast for this week is for the rally to resume, and we expect to see more upside over the next couple of weeks.
The Fred Report - Mid Week Update November 2, 2011
While we are surprised by the speed of this decline it is not altogether unexpected, and it is resolving overbought conditions on some of the indicators. We can see prices going a little lower, and they could possibly test 118.40 intraday, but our work right now suggests the 120 area should hold. Gold looks to have made a short-term low after testing support on GLD.
The Fred Report - Weekly October 31, 2011
We do not have any indicators suggesting an intermediate top of significance, so still believe pullbacks should be sharp and limited. If the market runs away from institutions, they have little time to recover before yearend statements hit client mailboxes. This could cause “performance chasing”. As long as GLD is above 165 this move could have legs. We continue to expect a strong move up in commodities into yearend.
