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.
The Fred Report - Mid Week Update October 26, 2011
We think the market is stronger than that and may only test the 121 area. We note that GLD has broken out of a small base. TLT is rallying as expected and an up week here would correct the oversold condition on the weekly FPO, and then set up further decline.
The Fred Report - Weekly October 24, 2011
The stock market continues to act well, but we have started to hit some overbought readings, and it is possible that we experience the first real correction of the current uptrend this week. In spite of the technical breakdown, bonds could bounce for a week here, and we would use that bounce to further lighten positions. We remain with a 10-month price target of 210 on GLD, or 2100/Oz for the nearby COMEX gold future, whichever occurs first.
The Fred Report - Mid Week Update October 19, 2011
Tuesday’s rally was an outside day to the upside, which is normally positive, and may be the precursor of a breakout of the trading range. We will not be concerned about the nascent up-move unless SPY penetrates 117 on the downside – and we continue to expect ultimate upside resolution.
The Fred Report - Weekly October 17, 2011
While overbought short-term, indicators suggest the rally could continue. TLT has broken down through 114 and should new lows for this down-move occur, the treasury market could drop sharply. It may be time to start some baseline positions in stock ETFs relating to agriculture.
The Fred Report - Mid Week Update October 12, 2011
Our accumulation model on the SPY is looking very positive here as well, suggesting that pullbacks, if they occur, are likely to be short, sharp, and quickly retraced. Our thought here is that if we are correct in assuming that the equity markets have hit their lows for the year, corrections will hold in the 113 – 114 area, and this area may not be tested. TLT is a bit oversold short-term and could bounce.
The Fred Report - Weekly October 10, 2011
While we remain optimistic about a rally into the end of the year, some of the market internals deteriorated a bit more than I would like to have seen. Our forecast is now that the market should rally through the end of the year WITHOUT violating the 1070 area on the SPX, or the 107 area on SPY. The commodities markets appear to be stabilizing and getting ready for their seasonal advance into the winter.
The Fred Report - Mid Week Update October 5, 2011
Trading continues to go along in a way that suggests the divergence bottom scenario is working, but the market remains precariously placed. If we are going to be right and the lows of Tuesday are indeed significant and possibly the lows for this correction, they should not be exceeded.
The Fred Report - Weekly October 3, 2011
While this may be one of those times when Fundamentals (which look ghastly and perilous) trump Technicals (which have improved markedly and now look quite attractive), the technicals suggest a tradable low is at hand. We have, so far, been wrong about extent of the bond move, but once again are seeing chinks in the façade of the bonds. We still maintain an objective of the 23.50 area on UUP, and 81 – 83 on the DXY.
The Fred Report - Mid Week Update September 28, 2011
On a technical basis we have most of the divergences we need for a bottom. We think this is the best chance of a bottom since August. We would move back to at least an equal weight for investors in the metals. We remain concerned that a test of 100 – 105 is possible.
The Fred Report - Weekly September 26, 2011
Stocks have declined into the price area we have been looking for to create a tradable bottom and some choppiness and up and down action are to be expected over the next week or two. The TLT risk remains – weekly and monthly indicators remain overbought, sentiment remains elevated, and accumulation models, though improved, do not support prices at these levels. We would use this move down as an opportunity to move back to an equal weight position in gold from the slight underweight we have been recommending for investors.
The Fred Report - Mid Week Update September 21, 2011
Foreign money may be coming into the states – and we would use the smaller cap US indexes for speculative capital for now. We believe RSX is trading better than the other BRIC markets because of oil, and should oil and oil stocks advance into yearend the RSX would benefit.
The Fred Report - Weekly September 19, 2011
This week looks like the correction could resume, and we could decline into lower closing lows that we have been forecasting over the next two weeks. Bonds should rally over the next couple of weeks, but are then setting up for what could be a significant decline. Trend systems are going negative on gold, suggesting some more corrective measures in this bull market could occur.
The Fred Report - Mid Week Update September 14, 2011
We could still see some more rallying through the end of the week – although our minimum upside target of 118 for the week has been achieved. We note strength in the Transports so far this week and this is a cause for intermediate-term optimism. We realize our best buy point is likely closer to the end of September and hopefully around 109 – 108 on SPY.
The Fred Report - Weekly September 12, 2011
We note that the Transports continue to act worse than the broad market, another concern, and the accumulation models on both the IYT and the SPY have gotten worse. The dollar index has resistance in the 80, then 82, area and, given the position of the weekly stochastic, could test that area. A dollar move could cause all of the commodities to trade down a bit.
The Fred Report - Mid Week Update September 8, 2011
This rally has some of the earmarks of a short covering rally, and we believe that it will continue through at least Friday. We expect a test of the SPY 123 – 126 area by the end of the week. After this rally ends, we still feel that a retest of the August lows is likely.
The Fred Report - Weekly September 6, 2011
Should the market finish this week strongly up, and then start to sell off – we are vulnerable to a move to, or through, the August lows. The strength in corporate and municipal bonds implies that whatever else is wrong fundamentally, there is unlikely to be a severe credit crunch like the 2007 – 2009 bear markets. We note that our “tale of two Europe’s” theme is alive and well – with Germany and France performing better than Spain and Italy.
The Fred Report - Mid Week Update August 31, 2011
This does not change our forecast of a retest of the lows after a test of the 123 – 125 area on SPY. % bears has increased again, to 36% – improving our model, so the healing process continues. We realize that should stochastics roll over and the moving averages cross back negative – another very sharp down-leg should occur which will take us to new closing lows. The agricultural commodities have a seasonal tendency to rally into September.
The Fred Report - Weekly August 29, 2011
While there is surface improvement accumulation models and such have not improved, we continue to look for a retest. Daily Bond indicators are actually somewhat oversold, so it could be that the bond market situation resolves itself with a short-term rally, followed by a more severe correction. Indeed, the reason for the market’s retest might turn out to be dollar weakness.
The Fred Report - Mid Week Update August 24, 2011
These big “one day wonder” type of rallies are consistent with bear markets, and as such the action would tend to confirm that this rally is a selling opportunity, and our retest scenario is alive and well. When the economy starts to emerge from recession, or recession fears, Small Cap stocks often perform better. We could see GLD in the 170-area or so, and TLT back to 100, but will monitor these carefully as the week progresses.
