The Fred Report - Weekly December 22, 2014Given the performance of New Highs/New lows there are some reasons to be cautious as 2014 draws to a close. It is a bit too soon to say energy has turned the corner, but it has entered the turn and so far it has remained on the road.The Fred Report - Mid Week Update December 17, 2014Another close below 200 moves risk on SPY to 194 – 193 by yearend. There were several more bottoming signs today on USO, but it is not a confirmed bottom unless it moves above 60, and then we still look for a retest.The Fred Report - Weekly December 15, 2014
The bottom line is that we should trade above 205 on SPY, say to 206 this week, and we would eliminate call positions on that move. We have to watch to see if U.S. growth slows as worldwide growth slows. we would view a move above $60/Bbl on oil as confirmation that the first bottom of the pattern has been made.
The Fred Report - Mid Week Update December 10, 2014Small Cap stocks are improving verses Large Cap stocks. The dollar is actually weaker than many believe as the biggest component – FXE – is still in its trading range. Oil is giving indications of a divergence bottom. This means that even if oil has a rally here it is likely to retest or slightly to exceed the first good low.The Fred Report - Weekly December 8, 2014
The end of this year could be interesting as IJR is giving buy signals such that it could outperform on a relative basis. Another area that may be showing cracks is Technology. DBA is a longer-term trade that should be up a bit in December, but really will show some positive movement in late winter/early spring.
The Fred Report - Mid Week Update December 3, 2014The market is thinner and a bit more caution but not outright bearishness seems correct to us. There is no outlook change for us in the oil stocks, i.e. a weak equal weight with XLE and Integrated Oils looking better than OIH and services.The Fred Report - Weekly December 1, 2014Stocks are interesting as the NASDAQ Composite made a new monthly closing high vs. the 2000 peak. As long as SPY stays above 201 the market is attractive short-term but that 201 – 203 area could be tested.The Fred Report - Weekly November 24, 2014
Stocks have likely started a Thanksgiving rally, and it has the appearance of broadening out, but once again we had a negative weekly advance decline line. TLT is trading in a desultory way, and we remain with our view that bonds have peaked, and rates have bottomed, for a while.
One of our favorite sectors, Healthcare, is trading well and should continue to lead. For MOO, above 58 targets 65 and this should test 57 – 58 even if it fails to break out.
The Fred Report - Weekly November 17, 2014Stocks have hit our main target of 203 on SPY for 2014, but our timing models are already in defensive mode so we are in no rush to make changes to models. Agriculture looks buyable and may be a good seasonal trade. USO had an inside week, often a suggestion of a trend change.The Fred Report - Mid Week Update November 12, 2014Stocks continue to rally but we are not seeing the kind of advance in smaller cap issues we hoped to see given formations on the NASDAQ advance decline line. DBA continues to show bottoming signs and this is a favorable seasonal period for Agriculture.The Fred Report - Weekly November 10, 2014
The market is moving up the capitalization scale and to be successful we should move with it. This should not affect the QQQ directly as that is actually a large cap index in many respects, but it may affect individual, smaller stocks – watch out for value traps. There are some more bottoming signs in the petroleum complex.
The Fred Report - Mid Week Update November 5, 2014We note that many articles have crossed our desk that let us know that as soon as the mid-terms are over the market will embark on the strongest rally of the last few years – and have concerns that we see a bit more choppiness before a real rally occurs. Unless GLD posts two closes above 116 it is still a breakdown.The Fred Report - Weekly November 3, 2014We would treat this as a narrowing market and put money into lower volatility, higher yielding names. USO and UNG have held support into the seasonal buy period, and are oversold enough to start the seasonal advance.The Fred Report - Mid Week Update October 29, 2014Stocks continue to advance, and are trading better than we thought they might, but there are still issues with broad market underperformance. We have no changes in oil, gold or bonds except to note oil is trading well given the proximity to October expiration, and TLT below 117 targets 110.The Fred Report - Weekly October 27, 2014Accumulation models on SPY, MDY, and IJR continue to lag price. For now the message of the market seems clear enough – if you are going to add money use large cap defensive stocks, or ETFs like SPLV, SPHD, or DVY.The Fred Report - Mid Week Update October 22, 2014
The risk is a flashy up open that trades down throughout the day and as traders we would sell an up open. Momentum indicators continue to suggest a retest of the low or even lower closing lows. GLD has traded up through 120 and if this holds the next test should be 122 – 123, above this is clear sailing.
The Fred Report - Weekly October 20, 2014SPY bounced at the end of the week, but accumulation models took a big hit and, along with bonds, suggested that some fairly heaving selling occurred that was not counterbalanced by buying at the end of the week. We would not sell Emerging Markets or Japan.The Fred Report - Mid Week Update October 15, 2014We have moved to a more defensive position in models A failing rally to 192 – 194 would be a concern. XLE is right on long-term support. A move back above 82 would suggest a bounce is due. The Fred Report - Weekly October 13, 2014
U.S. stocks have continued to weaken and are now testing the 190-area support on SPY. Indicators continue to deteriorate and we have concerns that this market could correct further.
