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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.
We remain with daily stochastic buy indications, and weeklies are in sell position. This implies consolidation, which is what is happening. The concern we have had for the uptrend is that the market would react badly to a weekly stochastic sell, and so far, it is holding on relatively well.
Since we have a buy-recycled daily stochastic on most indexes, and a daily FPO that looks like a small buy signal, we would expect this 280-area to hold on SPY, although as always, we would be mindful of risk management. Our target for 2019 on oil is 72/Bbl, and we expect that will be hit this winter.
We do not see a major bear developing, at least not without a rally first.
We like the trading, especially the down opens, and it looks as if we should see another one of these today.
We continue to look for a recycle in the daily stochastic on SPY, and to monitor other indexes to see if that signal occurs elsewhere. Traders can add a bit vs. a stop of 284 on SPY as if that breaks a test of 269 to 270 is possible.
SEA may have made a cutout, or false breakdown, low in December. This shipping index is a good measure of worldwide economic strength, and it has been down since 2015. Now there are some bottoming signs, and the monthly stochastic is in buy mode for the first time since 2017.
We have hit the bottom end of our upside target range for SPY for 2019. We are Over Weight XLF and this has rallied to the lower end of 28 to 29 resistance. Short-term support is now 27 and as long as this holds, we could see this break above 29 by the end of May.
Stocks made all time closing highs last week on some of the popular averages. This does not change our long-term trend system, which is neutral.
Watch Emerging Markets carefully, especially if UUP can move above 26.50 and DXY move above 98.20.
We still have no indicators that suggest anything other than maintaining positions, and a neutral outlook for now.
We would be watching IWM and IJR carefully here. The daily stochastics on small cap gave us the buy signal we had ahead of this run, even though the daily SPY did not recycle. When these give a sell recycle below 80 this rally should end.
We want to look at QQQ and ONEQ charts because we have some internal indicators on the NASDAQ that are flashing caution signs.
On an investment basis, we would rank SLX (Market Vectors Steel ETF) a buy. Our reasons are the double bottom at 34 or so, and a monthly stochastic that has just gone positive.
We have two targets on stocks for this year – 294 to 302 (last year’s targets, again), and 220 to 200 on the downside, which now seems to be over exuberant on the downside.
GLD has filled a gap and is oversold on the daily stochastic. Although the weekly stochastic is not yet oversold GLD should rebound a bit – not sure if 126 will be retested but GLD should at least bounce. EWS (Singapore) would be an interesting, if not unusual, addition to international portfolios.
It is interesting that this market is starting to have some similarities with 2015, the year before the last Presidential Election.
Once again, we are in a situation where the daily stochastics on SPY are coming down but not oversold, while IJR, IWM, and IYT are oversold.
We see no reason to abandon a cautious stance here. SPY should hold the area of the last low at 272, and if this fails a test of 265 or so is possible. We would watch this carefully on the next pullback – If it makes another higher low, IEO would be a strong addition to the oil component of portfolios.
We cover small cap India.
The patterns on some of the longer-term breadth indicators a]lso suggest caution is indicated here and now, but that the market should be higher in the second half of 2019.
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