The Fred Report - Conference Call June 12, 2025

Conference Call Recording:

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AI Summary of Conference Call (testing this out for now - Jack):

Weekly Market Call Summary - June 12, 2025

Overview

The Fred Report’s weekly technical market call, led by Fred Meissner on June 12, 2025, provided a detailed analysis of various markets, followed by a Q&A session with Geoff Garbacz and clients. The discussion focused on technical patterns, market sentiment, and specific stock and ETF analyses, with a bullish outlook for the summer rally.

Market Analysis by Fred Meissner

• Stock Market: No changes to the summer rally projection. Despite expectations of a potential down week, the market is likely to close up, trading slowly upward, characteristic of strong bull moves. Meissner emphasized avoiding big ups and downs, preferring steady gains.
• Small Caps: Strong accumulation signals have persisted for eight months, with head and shoulders bottom patterns forming on ETFs like VBR, IJR, IWM, and XTN. These patterns suggest a potential catalyst for a move higher, particularly into July and August. Meissner advised holding small cap positions.
• Bond Market: A rally in bonds is anticipated, targeting $92.5 to $95 by summer. Sentiment remains favorable for falling rates, despite concerns about rising debt. Meissner is cautious about trading bonds due to potential rate spikes.
• Commodities:
  • Gold: GLD remains bullish above $302. Below this level could signal issues, but consolidation suggests stability.
  • Oil: USO hit resistance at $75 but could reach $80 by summer. Favorable seasonality supports oil, though gas prices are muted, aligning with policy goals.
  • Agricultural Commodities: Soybeans and DBA are flat but poised for a rally into July.
• International Markets: Chinese ETFs show improvement, and international ETFs are expected to perform well into summer. Argentina is noted as a potentially crowded trade, warranting caution by July.

Geoff Garbacz’s Questions

Geoff Garbacz engaged Meissner on specific ETFs and market trends:

• Micro Caps (IWC): Outperforming small caps, already through its neckline, approaching $130 resistance.
• Recent IPOs (IPO - etf): Short-term base above $41, targeting $47 by July/August.
• Small Cap Value (CALF): Needs to break $40 to target $43-$45, stronger than large cap counterpart COWZ.
• Large Cap Value (COWZ): Similar to CALF but weaker, with a lower right shoulder in its head and shoulders pattern.
• Short ETFs (DWSH, BTAL): Struggling as small caps rally, suggesting a long bias.
• Bonds (TLT): Support at $85 should hold through summer; a break could signal trouble in July-October.

Garbacz highlighted the market’s “dull” phase, quoting the adage “never short a dull market,” which Meissner agreed with, noting bearish sentiment as a bullish contrarian signal.

Client Q&A Highlights

Clients posed questions on individual stocks, ETFs, and broader market themes:

• Stocks:
  • RKT (Rocket Companies): Could reach $15, but caution advised due to partial recovery above April’s breakdown.
  • BA (Boeing): No rush to buy; holding support but could drop to $175 if it breaks $203.
  • CVNA (Carvana): Normal pullback; buy at $311-$312, with support at $330.
  • ARKK: Potential run above $65, but ideal buy at $61.50.
  • HCI: Filled a gap; safe to buy or add to.
  • TLN (Talos Energy): Breakout above $250, hold through summer.
  • AG (First Majestic Silver): Hold unless below $7.50; silver rally could lift it.
  • MELI (MercadoLibre): Buy at current levels, with risk to $2250.
  • RKLB (Rocket Lab): Flat, hold above $25.50.
  • NVDA (Nvidia): Buy now, as delays could lead to chasing higher prices.
  • ORCL (Oracle): Breakout needs confirmation above old highs; buy at $190 if it pulls back.
  • MSFT (Microsoft): Hold above $465 for a summer rally.
  • RGNX (Regenxbio): Could reach $15 if it breaks $12; sell some at $15.
  • RIVN (Rivian): Base above $13; Volkswagen’s $1B investment and U.S. production are positives, though EV tax credit risks remain.
  • PANW (Palo Alto Networks): Hold into summer; recovering well.
  • RCAT (Red Cat): Turning up, target $11.
  • PDYN (Palladyne): Hold above $7.50, but limited upside near $11.
  • CRZBY (Commerzbank): Strong, hold through summer, support at $26.28.
• ETFs:
  • XPH (Pharmaceuticals): Improving, worth holding for yield-focused investors.
  • NLR, URA (Nuclear/Uranium): NLR preferred over URNM; nuclear utilities like Southern Company recommended.
• Currencies (DXY): No imminent breakdown; range-bound for years, with dollar stabilizing against euro and yen.
• Quantum Computing (QBTS, IONQ, RGTI, QUBT): Low short intensity; rely on technicals and volume. IBM highlighted as a safer quantum play.
• Utilities: Benefit from rising rates, but rate spikes may be temporary. Nuclear-focused utilities like Southern Company are favored.
• Argentina (GGAL): Hold through summer but monitor for overcrowding and inflation risks (47% annual rate in April 2025, down from 300% in April 2024).

Key Takeaways

• Bullish Summer Outlook: The market’s slow, steady rise supports a summer rally, with small caps and international markets showing strength.
• Technical Patterns: Head and shoulders bottoms in small caps and stable bond support at $85 are key signals.
• Sentiment: Bearish sentiment (e.g., Investors Intelligence) and a “dull” market suggest upside potential.
• Cautious Optimism: Monitor bonds and Argentina for potential risks in July-October; hold strong positions unless charts weaken.
• Actionable Advice: Buy high-quality stocks like NVDA and IBM, hold small caps and bonds, and trim overcrowded trades like Argentina by summer’s end.

Stocks of Interest Chartbook - download here

Most Requested Names: WMT, BROS, MMM, TGT

Layout: Daily chart is on the left and goes back about 5 months of data and the Weekly chart is on the right going back over two years.  The date label is contained on the axis just below the actual chart and above the Stochastics indicator.