The Fred Report - Weekly May 19, 2014Our benchmarks of NYA 11,000 on the upside, and below SPY 184 on the downside seem valid and we would wait to make a big trading commitment until we see one or the other confirm. We continue to see more strength in Industrials and Materials than Consumer names.The Fred Report - Mid Week Update May 14, 2014We remain with low volatility and defensive positions. Bonds have been choppy but have held 110 as measured by TLT and as long as this holds bonds can advance to 115.The Fred Report - Weekly May 12, 2014We have a set up for a trading rally, especially in Tech and Biotech. Real estate ETFs of all kinds look to be a solid income vehicle, with improving charts that have a way to go before hitting resistance.The Fred Report - Mid Week Update May 7, 2014
On stocks, a move above NYA 11,000 lessens the risk of a correction, and a move below 184 on SPY suggests a correction is underway. We believe positive fundamentals in financials have been widely discounted, such that this resistance may hold XLF for a long time.
Value stocks are improving relative to smaller cap growth names, which supports our view that it is likely that industrials and materials should continue to perform better than the former high flyers. We continue to suggest dollar cost averaging at a reduced rate, with the idea of accelerating this on a decline over the next month if the market starts to correct.
The Fred Report - Mid Week Update April 30, 2014There are no changes to our basic market opinions, except to observe that TLT has tested the 110 support area and held. Stocks have rallied into the end of April and this reflects favorable seasonality, but we may very well see some weakness in May per our forecast.The Fred Report - Weekly April 28, 2014
We continue to expect a correction in the SPY similar to the one already experienced by the QQQ, into the middle to end of May. TLT has rallied close to our target price range, BUT still may have a month to go in the time cycle. We continue to believe the gold market has had a 50% retracement and is in the first stages of starting a new bull phase.
Our theme of a tired consumer as measured by the charts of XY and XLI remains intact. GLD continues choppy as forecast, and the daily stochastic is down almost into buy territory.
Stocks rebounded last week as expected, but accumulation models and momentum suggest more corrective behavior is in store. The trading action looks like a correction in a bull market because some sectors have done so much better than others – and bear markets usually have strong commonality. For folks looking for a tactical opportunity, agricultural commodities may be the most interesting one at the present time.
NASDAQ is oversold enough to stage a short-term rally, while blue chips look like more decline is possible. We would use projected strength over the next week or so to diversify away from over weights in the “flyer” stocks and into positions in Industrials, Materials, and possibly even Income stocks to take advantage of this leadership change.
The Fred Report - Mid Week Update April 9, 2014U.S. stocks have tested, and so far held, support at the 184 area on SPY. While we think this can, and will, ultimately break, some volatility in here is expected into the Easter weekend. We would add stocks in Materials and Industrials, and would add sector ETFs in those areas also.The Fred Report - Weekly April 7, 2014Stocks are at an interesting juncture, and could start a correction into the end of May sometime over the next two weeks. We expect bonds to rally into the end of May, as measured by TLT, and believe TLT could hit the 112 area, perhaps a bit more on the upside. It looks like we have the start of a longer-term bottoming process in copper and other industrial metals.The Fred Report - Mid Week Update April 2, 2014SPY can trade up into the end of the week, but longer-term indicators suggest risk into April/May. Gold and bonds are acting as expected and should pick up strength at the end of the month if not a bit sooner.The Fred Report - Weekly March 31, 2014Stocks look to pull back and if this occurs it will be a great buying opportunity – maybe the best of 2014. For those advisors who have no exposure to gold, this area represents a good place to start to add either the stocks or the metal.The Fred Report - Mid Week Update March 26, 2014We would be slowly moving portfolios slowly towards SPX-type issues with an emphasis on Materials and Industrials, and away from Technology, with new money. China may have bottomed for at least a rally, and indicators support further advance in EWH as well.The Fred Report - Weekly March 24, 2014
We would use strength in stocks this week to prepare for a possible decline in April and/or May. Copper may have made a significant bottom on March 19th. The trading in the Chinese markets may very well mean that the fears are overblown, and that after the current hooraw is over the rebound could be tradable.
Stocks closed the week down, but still above the 184-area support we have been using to keep the short-term uptrend alive. The DXY may test 79, slowly and then rally.
U.S. stocks are having a consolidation week, but still remain up for the month, which sets up our scenario of a more difficult April and May. We remain bullish on GLD, but remain surprised that it is not testing some lower levels.
