The Fred Report - Weekly November 15, 2010The stock market dropped off at the end of last week and our opinion....is that we will rally into options expiration. Our accumulation model(for fixed income) has fallen apart completely, suggesting that bonds will under perform into the end of the year. We will use this sharp drop to add to commodity positions for a yearend rally in these markets. The dollar remains weak and in a downtrend, oversold bounces such as this to the contrary.The Fred Report - Mid Week Update November 10, 2010This is that option expiration is Friday November 19th and a choppy, down week would set up a shot at an up expiration. Should 96 break closing basis on the TLT, a test of the 94 area would be next. We have been looking for a sharp dollar rally from this area and it looks as if it has started. The Fred Report - Weekly November 8, 2010We believe this is a real up move and the yearend rally we have alluded to since October has started. While a yearend rally should lift all boats, we would tend to emphasize more attractive sectors (Materials, for example), rather than financials. We continue to like commodities, including gold, into the winter, and note that USO has also moved above the 37 area resistance.The Fred Report - Mid Week Update November 4, 2010Indicators are overbought, and we are at resistance. Bonds are interesting and the TLT had a sharp reversal and an outside day down. Advisors should have positions in metals. The Fred Report - Weekly November 1, 2010The stock market has maintained recent gains, but we see an excellent chance for a pullback on the election news. If the SPY starts trading above 120 we will become more short-term bullish. A move up to 102 to 103 for the TLT is not out of the question, but we then think rates should move higher into late November/early December.The Fred Report - Mid Week Update October 27, 2010We have no real change in our market opinion, which is that a sharp drop may occur after the election. We note that the SPY has rallied to test the 120 resistance again and that this is the key 2008 breakdown point that held the market back at the April highs. The dollar looks like more upside should occur, and this could have a deleterious effect on gold. We continue to look for 96 on the TLT.The Fred Report - Weekly October 25, 2010We continue to see signs that a sharp drop in stocks could occur soon, most likely after the midterm election. This should be a buying opportunity. Gold has started to correct and while we are near the 128 area on the GLD (SPDR Gold Trust) we do not have a buy signal yet. The big market for us on the international front continues to be the dollar, as it continues to look like a short-term bottom.The Fred Report - Mid Week Update October 20, 2010We have been looking for a pullback in the stock market and while we have been looking for this to happen around the election we are not adverse to a short-term correction now. We continue to advise weeding through portfolios with the idea that this short-term down move should give way to a strong up move.The Fred Report - Weekly October 18, 2010
While we remain quite bullish intermediate–term, we are seeing some overbought readings that suggest a pullback in stocks may be needed to set up another leg up. We remain longer-term bond bears and commodity bulls. The GLD has moved above our trading objective of 130 and we have sold down to a normal weighting in the metal.
The Fred Report - Mid Week Update October 13, 2010The stock indexes are slowly working their way up, the bond market has started to sell off a bit, and gold still has not exceeded the highs of the outside day negative reversal of 10/7/10. Key areas on these markets are TLT below 101 could target mid 90’s, and the SPY could test 118 by the end of this week. The dollar looks ready to rally and if the DXY can exceed Tuesday’s high of 77.93 it could test 81.The Fred Report - Weekly October 11, 2010We could be starting a yearend rally now rather than after a drop in October. We have enough of a buy pattern on the dollar to suggest caution if you are trading the currencies is warranted – a sharp rally is possible. While we like the looks of gold intermediate-term and it remains a favorable investment for us here, the GLD is primed to have a short-term sell off.The Fred Report - Mid Week Update October 06, 2010The SPY (SPDR S&P 500 Trust) has broken out above the resistance at 114 to 115. We continue to believe that the XLY (SPDR Select Sector Consumer Discretionary), and IYW (iShares Dow Jones US Technology Sector ETF) are leading sectors. We think that this rally is likely to be of sufficient magnitude that all sectors will participate – but the danger of underperformance through buying weakness rather than strength, especially at this time of year, is real.The Fred Report - Weekly October 4, 2010The stock market continues to drift up as it consolidates the best September since 1939. We continue to think that rates are going to rise into the fall and technically there is some justification for this stance as long as the TLT remains below 110. Oil and energy stocks look to be bottoming, which is contrary to normal seasonal tendencies. Asian indexes are improving and leading Europe and the US. This continues to suggest that economic growth is picking up and will ultimately impact the US.The Fred Report - Mid Week Update September 29, 2009The stock indexes have been trading choppy/sideways to up, which is resolving the overbought condition in some respects. The Transports have made new closing highs above the August highs. If the TLT is going to fail, it should fail in the 107-108 area and the next drop should break the lows recently set.The Fred Report - Weekly September 27, 2010Should this rally end we would expect to see a gradual, rather than sharp drop – so for now sharp drops are bullish and should be bought. We continue to believe that rates will rise into the fall, but in order to feel more sanguine about this the TLT needs to break the last set of lows (100.85 on September 16). International markets continue to look much better than their U.S. counterparts.The Fred Report - Mid Week Update September 22, 2010While we have to see, so far we remain optimistic, expect higher highs into the end of September, and think some choppy action now will increase bearishness. We also note that sentiment remains contrarian bullish. Our forecast of an immediate move to 130 on the GLD is likely.The Fred Report - Weekly September 20, 2010We are seeing some breakout-type action in our accumulation models, enough to support a run to the upside here, and at least hold the downside fairly contained. While our forecast has been (and still is) for a rise in rates into the fall, the next week or so could prove critical to the success of that forecast. As long as the GLD (SPDR Gold Trust) remains above the 121 area this market is likely to advance into the 130 area at least, by the end of the year.The Fred Report - Mid Week Update September 15, 2010The SPY has advanced towards the 113 area resistance and today traded at a slight new high for this move. We anticipate a bit of choppy trading today but enough strength by the end of the week to get us through this resistance. Traders can start to add positions slowly here and look for a move to the 130 area on the GLD if the 124 area holds closing basis.The Fred Report - Weekly September 13, 2010This is options expiration week, and the weight of the evidence is for at least an attempt to the upside. So far the pattern on the SPDR S&P 500 Trust (SPY) is an inverse head and shoulders bottom and a move above the 114 area would target higher highs. Our expectation is that this week will see the bond market break, and the stock market rally. We caution investors that we remain very positive on gold and the metals longer-term, but that we should be buying on a scale down to 116.The Fred Report - Mid Week Update September 09, 2010While we think the market can continue to advance here we are, in a way, in “no man’s land”. Individual stocks are acting tough here – we see all sorts of weird action, and this is normal for this type of market. As traders, we do not want to over commit, and rather let some opportunities present themselves. – they always do. We would be excited about a move back to the 118 area for the GLD, and would add to positions there.
