The Fred Report - Monthly November 2014SPY had a very volatile October, and there are reasons to expect more volatility going forward. We still expect an upside test the 203 level on SPY, and possibly 209 as long as support at the 190 area on SPY holds. For now, in spite of last month’s trading, the overall market view remains where it was – neutral, but slightly more attractive than last month – we would be a bit less defensive unless downside benchmarks are violated again.The Fred Report - Monthly October 2014SPY made a short-term “Alibaba top” as forecast. We still expect a test the 203 level on SPY, and possibly 209 as long as support at the 190 area on SPY holds. For now, in spite of last month’s trading, the overall market view remains where it was – neutral, but slightly more attractive than last month – we would be a bit less defensive unless benchmarks are violated. The Fred Report - Monthly September 2014SPY closed August near summer rally targets after an intervening pullback. We still expect a test the 203 level on SPY, and possibly 209. Failure to materially exceed these areas and then a break of 190 would suggest a correction of magnitude is underway. For now, in spite of last month’s trading, the overall market view remains where it was – neutral, and proximity to trading targets suggests that caution flags are out – and some call writing may be in order.The Fred Report - Monthly August 2014After some improvement, SPY hit summer rally targets and has started to sell off sharply, violating short-term benchmarks. A short-term rally should start from these levels, and this could test the 203 level on SPY. Failure to materially exceed this and then a break of 189 would suggest a correction of magnitude is underway. For now, in spite of last week’s trading, the overall market view remains where it was – neutral, but the break of short-term benchmarks suggests playing a bit of defense in this area.The Fred Report - Monthly July 2014Broad indexes like NYA have improved, and it looks as if our forecast of a weak first half and stronger second half in the economy has been correct. We still think SPY can trade at 203 and possibly 209 in 2014, and we have seen substantial correction in secondary indexes that now looks to be ending. The Fred Report - Monthly June 2014Sentiment remains too bullish, and some corrective behavior now would set the stage for a good second half to 2014. We still think SPY can trade at 203 or so in 2014, but are concerned that the latest rally is concentrated in several large cap “story stocks” and not a broad based move. This can mask weakness in the broad market. This is shown by the relative weakness in IJR and MDY.The Fred Report - Monthly May 2014Stocks look to be at a critical juncture once again. Sentiment remains too bullish, and some corrective behavior now would set the stage for a good second half to 2014. We moved to defensive in our stock portfolios and expect another pullback into the May/June timeframe. We still think SPY can trade at 203 or so in 2014.The Fred Report - Monthly April 2014Stocks look to be at a critical juncture once again. Sentiment remains too bullish, and some corrective behavior now would set the stage for a good second half to 2014. We moved to defensive in our stock portfolios and expect another pullback into the May/June timeframe. We still think SPY can trade at 203 or so in 2014.The Fred Report - Monthly March 2014Stocks corrected some of the overbought condition in January, and February was up as forecast. Short term indicators are neutral but support more upside. Sentiment remains too bullish. Stocks are still not well positioned to withstand a negative surprise. We remain neutral in our stock portfolios with more firepower should we see another pullback. We still think SPY can trade at 203 or so in 2014.The Fred Report - Monthly February 2014Stocks had a strong rally in 2013, and we remain long-term bullish. Short term excesses have been somewhat corrected by the recent short-term drop. Some of the internals, especially sentiment, continue to weaken. Stocks are still not well positioned to withstand a negative surprise. We still think SPY can trade at 203 or so in 2014.The Fred Report - Monthly January 2014Stocks had a strong rally in 2013, and we remain long-term bullish, while seeing short term excesses that concern us. The internals, especially sentiment, continue to weaken. A small correction now would be extremely positive, and lead to much higher highs in 2014. Stocks are not well positioned to withstand a negative surprise. We are comfortable maintaining a neutral/defensive position, looking to deploy cash on a correction. We think SPY can trade at 203 or so in 2014.The Fred Report - Monthly December 2013Prices have continued to rally, but the internals, especially sentiment, continue to weaken. Stocks are not well positioned to withstand a negative surprise. We are comfortable maintaining a neutral/defensive position, looking to deploy cash on a correction.The Fred Report - Monthly November 2013Stocks have had a strong rally in the first half of 2013, and have hit price projections made last November. The summer rally was the worst performance in a positive year since 1928. Sentiment continues negative. In other words, the market is not well positioned to withstand a surprise. We are comfortable maintaining a neutral/defensive position.The Fred Report - Monthly October 2013Stocks have had a strong rally in the first half of 2013, and have hit price projections made last November. The summer rally was the worst performance in a positive year since 1928. Sentiment continues negative. In other words, the market is not well positioned to withstand a surprise.The Fred Report - Monthly September 2013Stocks have had a strong rally in the first half of 2013, and have hit price projections made last November. If we have made a mistake so far this year, it is that we were not aggressive enough on this summer rally, which we normally play. Last month, we suggested that much of the summer rally would be retraced, and all but .14% of it was, with that gain being the worst positive year since 1928.The Fred Report - Monthly August 2013Stocks have had a strong rally in the first half of 2013, and have hit price projections made last November. If we have made a mistake so far this year, it is that we were not aggressive enough on this summer rally, which we normally play. However, indicators suggest that much, if not all, of this latest rally from June will be retraced, although our summer rally target of 176 on SPY remains possible in August. Caution is indicated, and a sharp down month in August or September seems highly probable.The Fred Report - Monthly July 2013Stocks have had a strong rally in the first half of 2013, and have hit price projections made last November. So far, this drop has been sharper than previous short-term corrections in 2013. Economically sensitive sectors have started to lag. Commodities are weakening, perhaps because our forecast of a slowing worldwide economy is occurring. Bonds have weakened in accordance with long-term forecasts but were much weaker than expected short-term. Bonds are oversold enough to bounce, this may not occur. Caution is indicated.The Fred Report - Monthly June 2013Stocks have had a strong rally, and have hit price projections made last November. Sentiment indicators have weakened suggesting the next drop could be sharper than previous short-term corrections. Transports and economically sensitive sectors have started to lag. Commodities are entering seasonally favorable periods and could advance. Bonds have weakened in accordance with long-term forecasts but are oversold and there could be a short-term rally. We will stick with our forecast for a weaker second half to 2013 for US equities, however.The Fred Report - Monthly May 2013Stocks have had a strong rally, and have hit price projections made last November. Sentiment indicators have weakened suggesting the next drop could be sharper than previous short-term corrections. Transports and economically sensitive sectors have started to lag. Commodities, XLB, and Emerging Markets are weakening. There has been strength in fixed income. This could suggest weakness in the second half of 2013. We will sick with our forecast for a weaker second half to 2013.The Fred Report - Monthly April 2013Stocks have had one sharp correction of what we believe will be two such drops before an intermediate top could be signaled. In this environment, sharp drops are bullish – but sentiment indicators are weakening suggesting the next drop could be sharper than previous short-term corrections. Transports, and economically sensitive sectors (except XLB!) continue to perform well, but we are seeing some weakness in Emerging markets, and strength in fixed income, that could suggest weakness in the second half of 2013.
