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Below are Fred's Weekly Reports with a brief synopsis of each. To view the full report, click on the title.
U.S. stocks are digesting last week’s gain and should advance more toward the end of this week.
U.S. stocks have acted about as we are expecting going into yearend. We expect further advance. We do want to point out that IJR has made new trading highs above 82, and advisors can start to add more Small Cap ETFs to models. We have been asked a couple of questions about MLP’S, and one of these is germane for the end of the year. These are oversold and likely to bounce in early 2020 in a “January Effect” type of move.
Stocks are down to begin the week, and this has corrected the short-term overbought condition. Indicators still suggest that there should be a rally into yearend, however. We have a short-term buy signal on FXE, suggesting a pullback in the Dollar.
One of the bigger surprises going into yearend has been the breakout in XLV.
IJR is flirting with the 82-area and should exceed this again by next week (and quite possibly Friday).
Note that the trading in IJR and IYT has been positive, and these look to be setting up for another run at their respective numbers of 82, and 200.
We remain positive, but would not chase things here, at least over the next week. Let them come to you.
Stocks have come close enough to our 312 target on SPY that a pullback could start at anytime, but it is not “guaranteed." Short-term support is 308 to 307, and less short-term projections come in around 300. If UUP can trade below 26, that would suggest this advance is ending.
The market is overbought and could see a pullback after our target of 312 on SPY is hit. We do expect a yearend rally after a pullback or consolidation.
Bonds had an interesting week, and TLT fell to our first downside target at 135. This may temporarily stop the decline in price and rise in rates.
The markets have continued to rally and the next short-term target on SPY comes in around 312. We would continue to add attractive stocks. We also observe that IJR traded over 82 (our key number) on Tuesday.
The market is trading well, and we are bullish, but officially our forecasting system remains neutral. We believe that the smaller indexes are poised to pick up into yearend. The real opportunity may be in KBWY. We ran our monthly FPO’s on West Texas Crude Oil and the CRB. Both of these are in buy patterns, suggesting an advance should occur, and may be suggesting that the economy could expand in an inflationary way in 2020.
SPY has made all-time highs as we have forecast. Obviously, this means trading indicators are overbought. In other words, new highs and overbought readings can also spark consolidation and a potential pullback. A close above 82 in IJR, and above 200 on IYT would signal the start of a yearend rally. UUP is a multiyear breakout and unless below 26 this is a strong chart suggesting higher prices.
The market continued to rally last week, and QQQ hit all-time highs. Market internals continue to improve, as New Highs/New Lows continued to gain strength and breadth is positive and improving, both on the NYSE and NASDAQ.
Stocks rallied over $300 on SPY for a bit but closed down at $298.99. The daily stochastic is elevated but not in sell mode. Unless TLT can move above 140 very soon we still look for a test of 136 at least.
We saw a slight increase in both the amount of new highs, and the difference between new highs and new lows, as there were twice as many net advancing issues on the New York on a weekly basis. Should we speculate in Britain at this time? Technical indicators suggest that the answer is yes for aggressive advisors.
TLT has started to weaken. We could see a test of 136 or lower.
The current market still looks like more rally is possible, although the chart pattern suggests the Friday gap will fill. While rates may not rise at the same rate as last week, they should continue to advance after some consolidation. We continue to have targets of 72 on WTI for this year.
SPY has held support and should rally back to the top end of the trading range, and possibly break out to new highs. TLT has rallied up to the top end of the range we have looked for and should start to pull back this week.
The economic news on Tuesday was a weaker ISM Manufacturing number and this hit small cap and the Transports harder than SPY.
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