The Fred Report - Weekly October 15, 2012
The SPY has declined unexpectedly into support, and is oversold enough to support a short-term rally, which we believe is still likely as long as SPY has not traded below 141. Bonds have also slowed up, although if this is a down week we could see some fireworks to the upside.
The Fred Report - Mid Week Update October 10, 2012
We have been concerned about the possibility of an intermediate correction but did think this week would challenge the upside. This could still occur, however the pattern on the short-term stochastic has become more negative. In our Sector Review we have noted bifurcation in the performance of tech stocks. This sort of variation in performance generally means a sector is about to weaken and this is now happening.
The Fred Report - Weekly October 8, 2012
We should attempt a rally in the first part of the week – but failing to close the week through 150 on SPY could be a problem. Long time subscribers know that one of my biggest concerns over the next few years is that rates will start to move up, creating losses in bond portfolios. Given the configuration of oil indicators at this time, a sharp rally in the early part of this week would not be a huge surprise – indeed we would expect this.
The Fred Report - Mid Week Update October 3, 2012
Stocks have traded sideways this week, and so far our projection for a short-term rally this week looks good. We look for a rally to 149 – 150 or so this week, with concerns if the SPY trades below 139. If USO trades below 34 a move to 33 or lower is possible and would likely take a rally off the table.
The Fred Report - Weekly October 1, 2012
From a technical standpoint, there are a few concerns, the biggest being that there was little follow through, and the short-term moving averages on most indexes have gone negative. We continue to prefer LQD, although price targets have been hit – and all bonds could see some correction over the next few weeks.
The Fred Report - Mid Week Update September 26, 2012
Should 143.98 be broken it would suggest the market is weakening, and should 139 be violated this would be added confirmation that problems were getting worse. We still see an overbought market, and the chance for a correction – but not as severe.
The Fred Report - Weekly September 24, 2012
It is likely that we see at least one more rally attempt and a new short-term high around 149 – 150, before any sort of correction really begins. If the metals are going to have a setback, this week is the week, and should GLD approach the 170 – 169 area we would look to purchase this.
The Fred Report - Mid Week Update September 19, 2012
We expect economic weakness in these last weeks before the election, and we note Bernanke MAY have been reacting to more than just current data with the magnitude of what he has done with QE3. A move for GLD above 172 would target 175 and then 184. We would add on a close above 172.
The Fred Report - Weekly September 17, 2012
The recent rally has resulted in overbought indicators such that a few choppy weeks could result. Traditional dividend and defensive stocks have been under pressure over the last week. TLT has weakened and now is as oversold as it normally gets before a rally but this rally may be short-term in nature.
The Fred Report - Mid Week Update September 12, 2012
Stocks have been in a holding pattern awaiting the German Court Ruling and the FOMC announcement. Indicator patterns continue to suggest there is risk in this market, but we still have no sort of trending sell signal. Gold and gold stocks continue to be our favorite area for new money. We also note that TLT is becoming oversold, and should stocks drop this should rise - but better looking are LQD and PGX, which continue to trade better than treasuries.
The Fred Report - Weekly September 10, 2012
Last week’s stock market rally was somewhat expected, but economically sensitive issues did better than we thought they would. The gaps in GLD and SLV are almost certainly breakaway or continuation gaps – and these are filled less often than exhaustion gaps.
The technical condition of the markets is such that unless equities “change character” and rally strongly on improved breadth and volume, the chances of a correction are way up from here into the end of the year. Gold and Silver rallied sharply at the end of August, and we continue to think they will outperform in a stock market correction.
We remain concerned should SPY penetrate the 137 area on the downside. Europe as a whole might be vulnerable this fall, and in any case if we are speculating on the long side we would especially want to hold US markets as they are better technically.
The Fred Report - Weekly August 27, 2012
Stocks pulled back as expected last week, and this should set up a strong close to August. Gold looks as if it has started the rally we have been expecting, and we maintain our six month184 target on GLD for now. BRIC countries, as well as other Emerging Markets, continue weak patterns – they remain an avoid for us.
The Fred Report - Mid Week Update August 22, 2012
The SPY has traded fully into our projected area of 140 – 143 with today’s trading action, and has staged an outside day with a negative reversal. While it certainly could be “the top” for now we maintain our strategy and view that August 31st will be the high close of the summer rally.
The Fred Report - Weekly August 20, 2012
The summer rally in US stocks continues, and we advocate sticking with strong stocks and sectors while examining portfolios carefully. Right now it looks as if TLT rallies this week, then falls off once again into the end of August, and then may mount another rally attempt.
The Fred Report - Mid Week Update August 15, 2012
We would use the last bit of this rally in August to become a touch more defensive – sell underperforming holdings, and move that money into something like SPLV or at least stronger sectors. We were expecting bonds to probe the upside and then fall below the support at 124.
The Fred Report - Weekly August 13, 2012
Overall, there is no change to our views – there is more upside in stocks and commodities into the end of August, and we will stay with these positions into the end of the month. Bonds are at a key juncture and this week could see some changes.
Stocks have continued their rally so far this week, and our forecast is for the market to be strong into the end of August. We do not believe QE3 will happen until after the election. The market is narrowing in favor of large cap stocks, which is traditionally been the precursor to a decline of magnitude.
