Traders who add in this area should be ready to take defensive measures below 190 as we believe risk is to 176 – 170 with the January lows a possibility on SPY. TLT has held support and could challenge the 120 area again, or even exceed it.
The Fred Report - Weekly October 6, 2014We believe fear of economic weakness in Europe is a strong driver of recent equity and currency market volatility and European ETFs are in an interesting position. Aggressive advisors should consider adding something in the Small Cap area, using a stop below 100 on UJR OR SPY trades below 190.The Fred Report - Mid Week Update October 1, 2014Monthly FPO’s on stocks have patterns such that our defensive stance is warranted and should continue for a bit. Bonds are looking a bit better as HYG was up Tuesday to end the quarter, and we need a bit more time to analyze the “Bill Gross effect”.The Fred Report - Weekly September 29, 2014
We have seen interesting news last week, with a lot of discussion of an “Alibaba top” which suggests at least some rally into the end of the quarter and possibly an up week. Gold continues to be of interest and while the trading is choppy we continue to see bottoming signs in this area, with Thursday being particularly interesting and positive.
Our benchmarks of SPY 194 and especially 190 on SPY should hold. The question is will the weekly stochastic on GLD turn up from this area. We believe it will, and that lows in the 115-area will hold.
The Fred Report - Weekly September 22, 2014Our concerns about a short-term top in stocks on expiration and the Alibaba offering remain – as we are in an area where short-term problems could arise, and some formations that suggest a pause is likely. Bonds rallied last week as forecast but the nature of the rally suggests a bit more of a trading range than a big up-move coming.The Fred Report - Mid Week Update September 17, 2014
Probably the most important development for us as forecasters and traders that we have seen so far this week is that EEM has held the 43 area which we have discussed ad nauseam and rebounded sharply. GLD as it is slightly below the 120 area and the weekly stochastic is below 20, as forecast. We think it could turn up by the end of this week or next.
The Fred Report - Weekly September 15, 2014Overall the market is trading well given that we started last week in an overbought condition. The sentiment for fixed income has changed this year. At the beginning of the year, virtually all market pundits were looking for rising rates – and now most of these folks believe rates simply cannot rise. GLD is finally in oversold territory and if weekly indicators can turn up a move of magnitude to the upside is possible.The Fred Report - Mid Week Update September 10, 2014We would be nervous if AAPL falls below 92. We have mentioned buying GLD at 123, 122, and 120 and while we may be early (and may be wrong, of course!) – we like the action now.The Fred Report - Weekly September 8, 2014Stocks ended with a decent advance, coming ever closer to our target of 203 on SPY, and setting us up for an interesting week. By moving below our first level of 117, TLT has likely signaled the start of a trading range, and it came close enough to our target of 120 (high of this move is 119.43) that we quite possibly may have seen the high of this rally that began in October 2013.The Fred Report - Weekly September 2, 2014
We have targets of 203 – 209 on SPY and these could be tested in September. If they are, then we would take some defensive steps. We have raised short-term trading stops on TLT to 117, although traders may continue to want to use 114.
We look at Technology, which is doing better now and may broaden out a bit more in the fourth quarter. As far as Latin American contribution to EEM is concerned, the charts of these markets have improved since we last looked at them, and there is reason to believe that they will contribute to (or at least not aggressively impede) a rally.
PDP, the high relative strength ETF is now slightly outperforming SPY showing a market that may be starting to trend a bit. We should now use 43 on EEM as a stop for positions we take in this market – and we should take, or add to positions at this time.
The Fred Report - Weekly August 18, 2014This week is setting up to be important as it is likely that the market will attempt to move above resistance or down through support this week or next. For traders we will move our benchmark from 110 to 114 on TLT, leaving it at 110 for investors. The Fred Report - Mid Week Update August 13, 2014We have been asked several questions about Europe, especially Germany and are there good substitutes for this chart on EWG? My initial inclination was to say no, but actually there could be some tax selling in this name in September/October so taking a tax loss now and substituting another European ETF may be a good idea if you own EWG.The Fred Report - Weekly August 11, 2014
We would expect more of a rally here and a possible test of the 196 – 198 area on SPY, and failure to exceed that area would be a negative. We remain bullish on GLD, but the performance of gold does not really have economic significance. Should EEM exceed 45 again, on this run, and accelerate, we could see the start of a big move.
Stocks are down again early this week, but remain in “no man’s land” and we actually like the action. We would actually add a little money to PRFZ or some of the other small and mid-cap indexes for those who want to put money to work.
We confess to nagging concerns about a slower than expected economy. We are very curious to (a) see the GDP numbers, and (b) the various markets reaction to them.
