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.The Fred Report - Monthly March 2013Stocks had the first 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 – our biggest concern would be if this rally stalls out in this range.The Fred Report - Monthly February 2013Stocks corrected this fall, moving close to our downside objectives, and the current rally is strong with key economically sensitive indexes leading the way. The first quarter of 2013 could be strong, and possibly the second half should be weaker, not stronger, than the first half of 2013. It looks like we have a momentum buy signal that could continue, with more choppiness possible.The Fred Report - Monthly January 2013Stocks corrected this fall, moving close to our downside objectives, and has kicked off 2013 with a rally. The improvement we are seeing in some of the economically sensitive sectors also supports some short-term upside action. The first quarter of 2013 could be strong, and possibly the second half should be weaker, not stronger, than the first half of 2013. It looks like we have a momentum buy signal.The Fred Report - Monthly December 2012
Stocks have corrected this fall, moving close to our downside objectives, but the market indicators have not improved enough to suggest the correction is over. A “bobbing cork” kind of market may result, with a final low in the 130 area on SPY in mid-2013. As part of this we could see a bit more sector rotation than we have seen over the last few years – so stay nimble!
The Fred Report - Monthly November 2012
Stocks had the forecast summer rally, which was been weaker than average. September rallied as well, and SPY has tested 148 to 150-area resistance. Intermediate indicators remain weak, and most technical indicators suggest waning or negative momentum. The “QE3 Up Move” has been almost completely retraced, and the market continues to show waning momentum, a concern – but this could change.
The Fred Report - Monthly October 2012
Stocks had the forecast summer rally, which was been weaker than average. September rallied as well, and SPY has tested 148 to 150-area resistance. Intermediate indicators remain weak, and most technical indicators suggest waning or negative momentum. New highs in small and mid-cap issues suggest the trend remains up, and improves the overall technical picture, but a sharp drop should occur in the next few months.
The Fred Report - Monthly September 2012
Stocks had the forecast summer rally, which was been weaker than average. Our objective of 143 was tested, but not exceeded on a closing basis. Intermediate indicators remain weak, and most technical indicators suggest waning or negative momentum. The correction from the next short and intermediate overbought reading could be the worst since 2011.
The Fred Report - Monthly August 2012Stocks are in the midst of the forecast summer rally, which has been weaker than expected. We remain with objectives of 143, which could be exceeded. Intermediate indicators remain weak, and we will evaluate the markets at the end of August, which is when the traditional summer rally ends. The correction from the next intermediate overbought reading could be the worst since 2011.The Fred Report - Monthly July 2012Stocks corrected to our forecast area of 132 and resolved the overbought condition on most indicators. What should have been a strong buy pattern failed at 136, our first stopping point. This is a concern. The expected summer rally could end in the most significant decline of 2012, Unless the intermediate technicals are repaired soon. Sentiment indicators are starting to deteriorate and put/call indicators are showing some complacency – how the market reacts to the next intermediate overbought condition is important.The Fred Report - Monthly June 2012Stocks corrected to our forecast area of 132 and resolved the overbought condition on most indicators. What should have been a strong buy pattern has, however, failed. This is a concern. We expected a summer rally which could end in the most significant decline of 2012.Unless this is repaired soon, we may simply decline. Sentiment indicators are starting to deteriorate and put/call indicators are showing some complacency in our view.The Fred Report - Monthly May 2012
Stocks have consolidated/corrected a bit and resolved the overbought condition on most indicators. We now expect a summer rally to occur on increased bullishness. This should start this month and could test the 148 area on the SPY, leading to the most significant decline of 2012. Sentiment indicators are starting to deteriorate and a summer rally would create enough complacency to cause a correction, in our view.
The Fred Report - Monthly April 2012Stocks have rallied strongly and exceeded the 2011 high on SPY, moving to the 140 – 143 area as forecast in November 2011. It is not surprising to see overbought readings on some indicators as this occurs. Short-term corrective behavior is likely, but sentiment remains elevated enough that corrections should be short lived. We need more price action to arrive at a new upside target, however. The Fred Report - Monthly March 2012
Stocks have rallied strongly and exceeded the 2011 high on SPY as forecast. It is not surprising to see overbought readings on some indicators as this occurs. Last November, we forecast a test of 1400 – 1430 on SPX, and stocks are close enough to this area that a correction could occur at any time, but we still expect to see a test of the low 1400’s.
The Fred Report - Monthly February 2012
Stocks have rallied out of the Inverse Head and Shoulders mentioned in last month’s report. It is not surprising to see overbought readings on some indicators as this occurs. Sentiment suggests a rally could carry further than people expect – a test of the 137 area highs on SPY is not out of the question, whether before or after a sharp short-term correction remains the question?
The Fred Report - Monthly January 2012
Stocks have appeared to have etched out an Inverse Head and Shoulders – a positive short-term price pattern. For this to be valid, stocks should start to rally in the first couple of weeks of 2012, which we expect. Should breadth remain weak (on an intermediate basis) as this rally occurs, we would have concerns. Sentiment suggests a rally could carry further than people expect – a test of the 137 area highs on SPY is not out of the question.
The Fred Report - Monthly December 2011
Last month, we noted that indicators suggested a bottom was forming, and this seems to have occurred. The November pullback has weakened our yearend rally forecast but not completely eliminated it, as the market has made higher lows. We suggest a bit more caution in here, especially if a short-term rally develops that challenges, but not exceeds, recent resistance.
