Tuesday’s breadth was positive while prices closed negative. This is often the precursor to a sharp rally. Note the McClellan has come down to support and is turning up – suggesting a short-term rally is possible.
The Fred Report - Weekly June 6, 2011
The stock market may end June weaker than where we are now, but the prospects of an intervening rally look pretty good. We caution advisors that interest rate markets are showing signs of fatigue and bonds area close to our targets. We suggest adding some of the agricultural ETFs. They are seasonal, as well as technical reasons for these to do well.
The Fred Report - Mid Week Update June 2, 2011
We note that the IWM and MDY both look stronger than the SPY, and this is a positive. We still feel that a rally in June is likely, but the risk of a peak in June has increased as well (after a rally). We continue to have concerns about the Euro and the weaker countries in Europe. We still expect a rally in the dollar.
The Fred Report - Weekly May 31, 2011
The stock market has declined for four weeks in a row, a situation that almost always produces rallies in bull markets. We expect a rally this week as well. Bonds look to have a bit more to go on the upside, but we would safeguard profits as we expect a decline in prices in the second half of the year. We expect GLD and DBC rallies to continue, whether or not the dollar rallies.
The Fred Report - Mid Week Update May 25, 2011
Should we decline from here, and accelerate into next week, we are setting up an ideal, tradable low. Ideal would be a close between 1290 and 1280 on SPX next Tuesday – this would be a perfect set-up on my monthly. We show IWM and SPY below, noting the broad market is weaker, suggesting that more of a decline could in fact occur.
The Fred Report - Weekly May 23, 2011
We would use weakness to slowly accumulate stocks in strong sectors. Overall, we expect higher rates, and lower prices into the end of the year. Commodities should continue a rebound rally, but this should give way into lower closing lows sometime in the next few months.
The Fred Report - Mid Week Update May 18, 2011
Given that it is expiration week – the market should attempt a rally for one to two days, which, if we are correct, should ultimately fail and move us into position for a decent buy point in May/June. Metals should also attempt to rally. We are an equal weight on GLD, and would avoid SLV.
The Fred Report - Weekly May 16, 2011
We continue to expect a correction in May. The bond rally continued last week and we continue to believe this market can advance into June before running into trouble. Oil, in particular, generally bottoms at the end of May/early June in most years – and then we have our “summer driving rally”.
The Fred Report - Mid Week Update May 11, 2011
The sell formation we have will be eliminated by a close above the recent highs at 137.18 Strongest sectors remain Staples and Discretionary for now.
The Fred Report - Weekly May 9, 2011
We hope for a rally early this week that gives way to a decline into the end of the month. U.S. bonds continue to look attractive and our forecast remains for a rally in TLT, LQD, and MUB into late May to June. We move back to an equal weight on metals – short-term they are very oversold, and this is likely not the final low.
The Fred Report - Mid Week Update May 4, 2011
We continue to think there is a bit more downside as weekly and monthly indicators need to correct as well. We remain intermediate-term bullish on commodities, a sharp drop into May is certainly possible.
The Fred Report - Weekly May 2, 2011
We remain cautious on the markets, expecting a drop into the May/June period..... the big trade for 2011 is a rally in the second half of the year. We advised underweighting the metals last week, and see the possibility of a sharp drop, before further advance.
The Fred Report - Mid Week Update April 27, 2011
The last few days of the month are usually strong seasonally, and it is possible that we continue to rally through Friday, but after that we enter a period of risk for the market. We still see the possibility of a decline into a low in May.
The Fred Report - Weekly April 25, 2011
We continue to see the possibility, even likelihood of a correction in stocks, and advise subscribers to plan accordingly. We would particularly look at Tech and the NASDAQ as an area of weakness, and add money to XLP-type names for any buying we do over the next few weeks.
The Fred Report - Mid Week Update April 20, 2011
Should we be correct in our forecast, the end of the move will be much more volatile than the beginning. Healthcare has improved substantially over the last few weeks and the most attractive subgroup within healthcare is Biotech.
The Fred Report - Weekly April 18, 2011
Our accumulation models have weakened markedly on the major indexes, with the exception of Small Cap stocks. Commodity markets that benefit from international turmoil continue to trade well, but the agricultural commodity ETFs we follow are running into trouble, and look like a seasonal drop into May is possible. The FXE has been a bit stronger than we have expected but there are some signs that this may be ending.
The Fred Report - Mid Week Update April 13, 2011
Stocks have, so far, sold off this week, and while we still have targets of 135 on the SPY (SPDR S&P 500 Trust), our real concern is the market correction into May we have been forecasting may have begun a bit early. We note that ETFs such as the MDY and IWM have broken down through short-term support, and these have been market leaders. Should we decline into May the setup should be here that we have been looking for, for a strong move up in the second half of the year. We will look to buy a move in DBC to the 28 – 30 area if we get a signal to do so.
The Fred Report - Weekly April 11, 2011
We have an outstanding target of 135 on SPY, before a correction should occur into May. We remain concerned about a rise in rates in the second half of the year, and should we be wrong this will occur sooner rather than later. Oil has continued to advance and the USO (United States Oil Fund) has gapped through the key 44 area, suggesting higher oil prices could continue at least through the end of this week.
The Fred Report - Mid Week Update April 6, 2011
The IWM made all time highs on Tuesday. We are close to another correction, but some higher highs, and a challenge of the 135 area is likely before the market starts a correction into May. We like Gold longer term and maintain our 14-month target of 152.
