The Fred Report - Weekly June 7, 2010We continue to expect a choppy market with sharp rallies, but a longer-term downward bias for the next couple of months. Aggressive advisors not afraid to take risks may now want to add international bond exposure again. Our accumulation model is starting to show some selling in gold on this rally.The Fred Report - Mid Week Update June 3, 2010We certainly could see a rally for the first two weeks of June, which could then fall off into the end of the month. We feel that this correction (which we feel is still underway) is a correction in a bull move, and that higher highs for the year will result.The Fred Report - Weekly June 1, 2010We note that daily indicators are oversold enough to produce a one to two week rally at this point. We continue to suggest taking some capital gains in bond positions at this juncture. As long as the GLD remains above the 115 area we would expect new highs through summer at least. For now we look for a pullback in the dollar. The Fred Report - Mid Week Update May 26, 2010Short–term indicators look like a good trading rally should now occur. It would be ideal to see the market stabilize here and build a base where we chop around for enough time to get the monthly and weekly indicators down into a buying zone. Traditionally, stocks rally some into Memorial Day weekend.The Fred Report - Weekly May 24, 2010While we remain cautious a few moths out, we can still see a positive end to 2010. We continue to look for new highs in Gold through summer and again in the winter. Overall, we expect speculative money to move into small and mid cap US stocks, and away from international markets for a while.The Fred Report - Mid Week Update May 19, 2010The momentum on the downside coming into May was stronger to the downside than expected. We see weakness in Financials, Healthcare, as well as Utilities. For traders, should close below SPX 1110 we would cover trading shorts.The Fred Report - Weekly May 17, 2010This week is options expiration, and is the first one in a while where there has been a surge in put buying in the equity indexes. Often this leads to very volatile trading. We note that Friday’s rally on the TLT filled a gap, and if this market turns down this may signal a move back down to the bottom end of the trading range. Indicators on oil are suggesting at best a weak rally, and likely no rally at all.The Fred Report - Mid Week Update May 12, 2010Small and mid cap indexes area still showing leadership. We note that commodities still look like leadership.The Fred Report - Weekly May 10, 2010This is the first correction where the SPY has outperformed the Russell and smaller cap indexes. TLT should start to come down from this level. Accumulation models look strong, the commodity is now oversold, and we are right within the seasonal window we have been looking at for a rally to begin.The Fred Report - Mid Week Update May 05, 2010We are in the areas both in time and price where it makes sense for a rally to start. We continue to feel that this summer rally (should it in fact occur) will be led more by commodities, consumer discretionary type stocks, and industrials and less by financials and healthcare.The Fred Report - Weekly May 03, 2010The stock market is now in the window of the time period we have been looking for to make the low that would begin a summer rally led by commodities and commodity related stocks. Now is probably the time to add some hedges (fixed income), while realizing that the rate rise we have mentioned this year could occur this fall, and not now. We note that the Euro may have recently staged a false breakdown.The Fred Report - Mid Week Update April 28, 2010The stock market has started to correct, which is what we have been hoping for over the last week or two, and we continue to look for a summer rally led by commodity names. We continue to look for choppy action into early May. The FXE has hit new lows. This represents the dollar’s best chance to rally and test the 86 area.The Fred Report - Weekly April 26, 2010The summer rally may have started earlier than expected. Overall, this market is acting like the 1975 to 1980 period – and this same sort of bullish sentiment was a feature of that time as well. The late 1970’s also showed strong out-performance by small and mid cap stocks, just as we are seeing now. The smaller cap ETF’s (HAO and JOF respectively) continue to outperform and we consider this an indication that the world economy continues to improve.The Fred Report - Mid Week Update April 21, 2010The internals have been improving and our favorite sectors (Energy, Discretionary, Tech, and Industrials) are all acting better. Financials still look weak to us relative to the foregoing, as do Utilities. Oil stocks are rallying much more than oil itself.The Fred Report - Weekly April 19, 2010The weight of the technical evidence suggests that this is a reaction to an overbought condition within a continuing uptrend. We would position in Technology, Energy, Discretionary, and Industrial stocks and sectors over the next few weeks, in anticipation of this rally.The Fred Report - Mid Week Update April 14, 2010It is options expiration and usually the market has at least one down day during expiration week, even if there is a positive bias overall to the week. We are detecting a bit of relative weakness in financial stocks and note that there are layers of resistance between 16 and 18 on the XLF. The Fred Report - Weekly April 12, 2010A look at other key indexes shows that leadership remains in the small to midcap space, which is normal when emerging from a recession. Our longer – term view remains that rates are going up, and that appropriate strategies will mitigate this risk. We believe that a summer rally in commodities will lift energy markets.The Fred Report - Mid Week Update April 07, 2010The IWM had the first close above 70 today. While not everything acted great, this is still significant and suggests the chance of a pullback is becoming less likely. As mentioned, we believe a dominant feature of this summer’s market action will be a rally in the commodity complex, in particular, oil. We continue to feel that the big rise in rates is going to occur in the fall and not now.The Fred Report - Weekly April 05, 2010Our benchmark for the market is two closes above 70 on the IWM, and should that occur, we will become more bullish short–term. We continue to feel that rates are going up longer-term, and that eventually hedging strategies will be needed for clients that are heavily invested in bonds. Should the USO close above 42 we would expect a move to 48 or possibly more by the end of summer.
The Fred Report - Mid Week Update March 31, 2010We continue to look for the market to stage a small drop here before a summer rally that puts the indexes, including the SPX, at new recovery highs. It looks as if more dollar rally is imminent, and should be underway by this Thursday at the latest.
