The Fred Report - Mid Week Update September 21, 2016No change in our view on the stock indexes, which is that this is a short-term bottoming pattern on the indexes, and the leading index will still be the NASDAQ at least through the end of September.The Fred Report - Weekly September 19, 2016SPY and QQQ are in short-term buy mode, but QQQ looks stronger and should outperform into the beginning of October. We continue to watch Europe, EFA, and all of the developed market ETFs as they show weakness relative to the Emerging Market units. On a relative strength basis there is no reason to own the weaker countries, and on a chart basis the most attractive of these remains Switzerland.The Fred Report - Mid Week Update September 14, 2016
We would expect an up day on Wednesday, with more volatility, and a close below 212 would be a surprise. While we do not expect a catastrophic decline (for TLT) here, should this occur it could take equities along for the ride. An indication of this would be a close on TLT below 133.
We have been focusing on the 212 area on SPY as a benchmark for this market. For now, this is close only – we hope and expect this to be penetrated on the downside early Monday. The next support on the daily TLT chart is the gap between 135 and 133.50. If that breaks the next stop will be 131 – 129. We do not expect these areas to be challenged immediately – rather we expect some stability and a trending advance in prices.
The Fred Report - Weekly September 6, 2016We remain with a stop at 212 on SPY, and unless we see closes below that number the market should be fine. We remain with our target of 223 on SPY, to be hit sometime this year. Advisors who are not in gold now, and want positions, should buy it now. While there is a chance that it moves lower, our projections suggest another advance is more likely, and this one could move it above 130 (GLD).The Fred Report - Mid Week Update August 31, 2016What IS interesting is the amount of negative commentary from several firms. It is quite rare that we have seen such uniform negativity out of major firms, and in our view the technical condition of the market does not justify it. We would only be concerned if SPY closes below our benchmark price of 212.The Fred Report - Weekly August 29, 2016For a good while now the Regionals have been more popular than the big national banks, but if rates start to move up this could change. One of our forecasts for 2016 is that we should see a stronger dollar in the second half of 2016, and so far, this set up is holding for us.The Fred Report - Mid Week Update August 24, 2016We could add High Beta to existing positions, but not get rid of dividend and Low Volatility ETFs. We continue to see signs the market is broadening out and this should benefit SPHB. For those looking for an ETF to buy that is not correlated to stocks, we like GEX. The Fred Report - Weekly August 22, 2016
EMLC is also interesting as the weekly chart shows a rounding bottom with support in the 17.50 to 18 area and resistance in the 20 – 21 area. I would consider buying this on down days. DBB short-term support is important and is 12 – 12.50, and resistance is 14.50 to 15.50. Stochastics are overbought but the pattern is favorable, although suggesting consolidation. We would buy this on down days.
We remind all to watch the trading in TLT, below 137 would lead to a sharp decline, and this looks to occur soon. IBB is now at resistance and it is possible that the trading indication is largely over. Our target was around 300 and this is being tested.
Those that can use soft commodities should consider them rather than oil, for commodity exposure and diversification away from the metals, which remain our favorite area. BAC is trading right around resistance in the 15-area. The technical indicators are still positive overall, but the daily stochastic is overbought and in position to recycle, but in a solid short-term uptrend.
TLT continues to hold up but the weekly stochastic is now in sell mode and we should see more downside here. DBC has made what looks like a bottom in this area, but unless it can move above 15 there is a possibility that this will simply be a base.
TLT held support on a closing basis, while trading just a bit below it intraday. The support number is 137.50 and some closes below this will be a sign of concern. With long-term trend systems positive on gold we want to have a position.
The Fred Report - Mid Week Update August 3, 2016We have been expecting some market pullback as indicators are overbought. It is not bad, and should be contained by the 210 – 212 area on SPY. TLT had a better day than we expected in some respects, but the pattern is still precarious. Gold continues to look attractive and is challenging the 130-area. We think it will move above 131 or so on this advance.The Fred Report - Weekly August 1, 2016Three things we will be looking for will be out performance of IWM vs. IJR, continued improvement of NYA vs. SPX, and of course improvement of the NASDAQ composite relative to the NASDAQ 100. We continue to look at our longer-term FPO’s on the bonds. These have a set up for a sharp rise in rates in the near future. Oil still looks like a trading range to us, but after the August contract goes off the board there is downward seasonal pressure until November.The Fred Report - Mid Week Update July 27, 2016
Stocks are consolidating recent gains and working off the overbought condition, and we have no change to our comments. Some traders have indicated buying EEM, which is not our favorite. We prefer PIE, as it should do much better if this market makes a big move.
The Fred Report - Weekly July 25, 2016We noted on last Thursday’s conference call that if IJR can close the month above 120 the long-term trend system will go positive on small caps. This week we have a set up for a rise in rates that could be one of the sharpest of 2016 – and timing-wise it should occur in the next couple of weeks. Our work suggests the FXY will consolidate with the 89 – 90 area as support and 98 – 100 as resistance. Above 100 on FXY targets 115.The Fred Report - Mid Week Update July 20, 2016Stocks look to be consolidating an overbought condition on the daily and weekly stochastics, but the pattern remains positive, and we would use declines toward 212 on SPY to add to positions. When combined with other indicators on bonds, we caution advisors that this market is vulnerable. We show the chart below, and again indicate that there is more risk here than the market believes currently.The Fred Report - Weekly July 18, 2016
We have seen another sharp advance in bullish sentiment, this time from 41 to 50% bulls in just over 2 weeks. This is similar to the advance we saw before Brexit, and if there is a market surprise the result could now be the same – a violent, sharp drop. Both the DXY and UUP have built what look like bull flag formations on daily charts. We remind all readers that our forecast has been for a stronger dollar in the second half of the year, and a move above 25.07, targets 25.50 and likely higher.
More important to us is that the market is broadening out – IYT beat SPY again today and some of the smaller indexes are showing improvement. While one day is not overly significant, there have been sporadic signs since February of improvement. TLT had the biggest drop we have seen in ages today. We have been concerned that the last part of the advance in this ETF has been fluff and speculative buying, not solid investment.
