The Fred Report - Monthly July 2011
The SPY declined, but not enough to give us the set up we wanted to insure a strong summer. Breadth indicators have improved, and sentiment indicators have improved as well. We have felt that the biggest opportunity of 2011 would be a buy signal after a spring correction. While an intermediate buy could still occur, intermediate indicators are not as clear as we hoped to see at the end of June. This suggests a summer rally is likely – and we will evaluate the move as short-term indicators become overbought.
The Fred Report - Monthly June 2011
The SPY has declined, but not enough to give us the set up we wanted to insure a strong summer. Breadth indicators have improved, and sentiment indicators have remained negative. We have felt that the biggest opportunity of 2011 would be a buy signal after a May correction. While this could still occur, intermediate indicators are not as clear as we hoped to see at the end of May.
The Fred Report - Monthly May 2011
The SPY has rallied through our short-term objective of 135 on the SPY, but not by much. Breadth indicators have improved, but sentiment indicators have worsened markedly – including some prominent bears moving to the bullish camp. We have felt that the biggest opportunity of 2011 would be a buy signal after an upcoming correction. If this scenario is going to work, the market should be correcting by mid-May.
The Fred Report - Monthly April 2011
The SPY has rallied through the forecasted 130 area on the SPY, and come back down to test it. While this is favorable price action, we do not see corresponding strength in breadth indicators, and sentiment indicators and headline risk keep us cautious. We have felt that the biggest opportunity of 2011 would be a buy signal after a correction, and it is possible that the correction has started. If so, indicators, especially intermediate ones will become oversold, and this means a further correction in prices.
The Fred Report - Monthly March 2011
The SPY has rallied through the forecasted 130 area on the SPY, and come back down to test it. While this is favorable price action, we do not see corresponding strength in breadth indicators, and sentiment indicators and headline risk keep us cautious. We have felt that the biggest opportunity of 2011 would be a buy signal after a correction, and it is possible that the correction has started now. If so, indicators will become more oversold than they have so far.
The Fred Report - Monthly February 2011
The forecast test of 130 on the SPY has occurred, and we have fallen sharply from that area, on news of possible regime changes in the Middle East. Such a surprise, when the indicators suggest the market is vulnerable, often leads to a sharper correction than would otherwise occur. We have felt that the biggest opportunity of 2011 would be a buy signal after a correction, and it is possible that the correction has started now. If so, indicators will become more oversold than they have so far.
The Fred Report - Monthly January 2011
The forecast yearend rally has occurred. Indicator patterns suggest either (A) a short-term peak is at hand, or (B) the market will change character via a significant breadth and volume surge, which would fix the negative indicator picture. We continue to have SPY 130 as a target – perhaps this area will be tested before a short-term correction begins.
The Fred Report - Monthly December 2010The SPY has broken above the 114 resistance noted in the last report and is consolidating. The consensus opinion is that “gridlock is good” for the markets. We believe it is, but think the market has discounted this to some extent. So far our scenario of a sharp drop after the midterm elections has played out; now we look for a yearend rally which may lead to an intermediate top.The Fred Report - Monthly November 2010The SPY has broken above the 114 resistance noted in the last report and is consolidating. The consensus opinion is that “gridlock is good” for the markets. We believe it is, but that in harder to sustain a new upleg, a sharp corrections is needed. This could occur soon after the midterm election. Should our scenario play out, next year should be good for equities.The Fred Report - Monthly October 2010The SPY has broken above the 114 resistance noted in the last report and is consolidating. Media pundits have moved resistance up to 115, and should this area be exceeded we could see more upside on increasing volume. Overall, the markets continue to trade well. We still see widespread skepticism, which we view as a positive.The Fred Report - Monthly September 2010The SPY failed to break out of the downtrend in August, but has another chance to do this now. We are primed to make another test of the 113 area, and should the SPY move above 114 this could be a significant breakout. Should another failure occur, we would have concerns.The Fred Report - Monthly August 2010While we thought the last decline would occur after a summer rally, we did feel it would be the worst correction since the 2009 lows. Sentiment remains very negative as the market advances, a contrarian plus. Overall, the message of the market seems to be that this has been a normal correction, and not a new bear market. Should the market continue to advance, new highs for the year could be seen before the next significant correction. Failure in here could imply a test of the recent lows, or new lows for the year. We remain positive, while observing risk management parameters.The Fred Report - Monthly July 2010We thought this decline would occur AFTER a summer rally, but it is instead occurring now. Sentiment is getting better. Overall, the message of the market seems to be that this has been a normal correction, and not a new bear market. We remain longer–term positive on equities Conditions for an intermediate rally are present. A test of the 950 area on the SPX remains possible, although not probable, at this juncture.The Fred Report - Monthly June 2010We thought this decline would occur AFTER a summer rally, but it is instead occurring now. Sentiment is getting better. Overall, the message of the market seems to be a normal correction, and not a new bear market. We remain longer–term positive on equities with a caveat – this correction should take more time, and it is possible that the markets make new lows before the next intermediate rally. A test of the 950 area on the SPX is possible, although not probably at this juncture.The Fred Report - Monthly May 2010We are seeing the short-term decline in US stocks we wanted to see, to set up a summer rally. Sentiment is getting worse. Overall, the message of the market seems to be what normally occurs in equities after a recession is in fact occurring. We remain longer – term positive on equities with a caveat – should we see the summer rally we forecast, the next decline could be the most severe of this new bull market. The Fred Report - Monthly April 2010We saw the short-term decline in US stocks we wanted to see, followed by a rally where blue chips lagged, and broader indexes, led by Mid and Small Cap stocks led the advance. Sentiment is improving. Overall, the message of the market seems to be what normally occurs in equities after a recession is in fact occurring. We remain longer – term positive on equities.The Fred Report - Monthly March 2010We saw the short-term decline in US stocks we wanted to see. Sentiment is improving. The recent decline occurred later than we wished to see, and intermediate indicators may need more time to correct because of this. Overall, the message of the market seems to be that while more backing and filling could happen, the next strong advance is probably only weeks away at the most, and could occur right now. The Fred Report - Monthly February 2010We are seeing the short-term decline in US stocks we wanted to see to turn the January Barometer negative. However, sentiment remains negative and most articles suggest the January Barometer does not apply. The decline is also occurring later than we wished to see, and intermediate indicators may need more time to correct because of this. Overall, the message of the market seems to be that more backing and filling is in order, with lower lows a possibility, before the next strong advance.The Fred Report - Monthly January 2010We would love to see a short-term decline in US stocks to turn the January Barometer negative, but often we don’t get what we want. Intermediate-term all look positive, and it is likely that a significant correction will be pushed out into next quarter. In our Research Piece we show some data suggesting that Small to Mid Cap stocks outperform in the two years following a recession, and technically it appears that could occur this year as well.The Fred Report - Monthly December 2009We expect a stock market rally into the end of the year followed by a correction in the first part of next year. We would use strength over the next two months to lock in profits and formulate a plan for defensive positions. We note and respect the possibility of market rotation, and further advance, on dollar strength – which we feel would be a surprise to the markets.
