The yearend rally continues, but on deteriorating internal technical indicators. For those who have been waiting for an opportunity to add bonds to client portfolios, we can add some bonds here. Commodity markets are trading well going into yearend and we should see continued upside with leadership in the petroleum complex.
The Fred Report - Mid Week Update December 15, 2010
We continue to take some defensive measures. We could see commodities push up into the end of the year even if stocks falter. Sentiment is worsening, and is one of the technical underpinnings of the market where we have concern.
The Fred Report - Weekly December 13, 2010
Last week was choppy enough that this week could be up strong. We continue to see 2011 as a relatively quiet year for bonds. For this week, we would look for a sharp up move in the price of energy commodities and energy stocks as well.
The Fred Report - Mid Week Update December 8, 2010
We remain bullish through the end of the year and see fairly strong potential as many portfolio managers are lagging the market and have to buy to show performance. There is a fair amount of resistance here – and some choppy trading would set up a strong expiration next week. Tech, which has been a leader all year, has suddenly started to lag. Gold is running into resistance in this area, as are mining stocks.
The Fred Report - Weekly December 6, 2010
We expect continued higher prices, and less chop than most pundits would expect. This may end in a significant intermediate top. Right now, we are looking more for stability than higher rates. We believe the oil market will trade stronger next year, as renewed vigor in the world economy causes prices to rise.
The Fred Report - Mid Week Update December 1, 2010The set-up for a yearend rally in December remains intact, and this rally should start relatively soon, we think as early as today, but certainly by Friday. TLT has rallied into the projected resistance area and staged a reversal day on Tuesday. This suggests choppiness and consolidation could occur in the interest rate markets. The dollar has rallied into the middle of our projected target range and is overbought.The Fred Report - Weekly November 29, 2010Stocks have come down a bit, and the daily indicators have been reloaded enough for a yearend rally to start at any time. Note that on a closing basis the MDY is within approximately 7% of its all-time closing high in 2007, and that the QQQQ is within approximately 5% of its 2007 closing high. The TLT has fallen to our 96 area and is etching out a likely bottoming pattern.The Fred Report - Mid Week Update November 24, 2010The MDY and the QQQQ are actually the leading indexes. We remain intermediate-term bullish. We still feel the next two to four weeks are up.The Fred Report - Weekly November 22, 2010We continue to feel that we could have a stronger than expected yearend rally. We could see a range from 94 – 101 or so develop on the TLT. The GLD, DBC, and USO should start to advance this week. We would look for a short-term dollar decline that could take the dollar index back down into the mid 76’s. The Fred Report - Mid Week Update November 17, 2010Ingredients are set for a rally, and we would like to see a down open followed by a rally to signal this. Accumulation models for commodities suggest this sell off has gone too far, and we look for rallies here as well. We conclude that the primary trend on the dollar is down, and this gives added impetus to our expectation that this is a rally in downtrend. 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.
