The Fred Report - Weekly October 5, 2015Our forecast remains for this rally to carry SPY to 198 – 201, and then a possible retest of the lows made thus far. XLE should get to 67.50 to 68.50 and PSCE could test 20 on this rebound, and if oil starts to improve they could do even better.The Fred Report - Mid Week Update September 30, 2015If our idea is correct the market could rally back towards 200 or so on SPY, and then revisit this area or lower, again. How will we know a rally is underway? It should occur if we exceed the Tuesday high. We would love to short TLT at our target of 126 – 128, and we may do so in our models if it can get there. GLD is in sell mode on the daily stochastics and we would love to see this test 106. We would look to buy it there.The Fred Report - Weekly September 28, 2015
We should see a rally back toward 198 to 200 on SPY this week, but the internals suggest this could and should fail, setting up the retest of the low we have been looking for. We have had a lot of questions about Emerging markets, and the bottom line is we still are not comfortable taking a position here.
The Fred Report - Mid Week Update September 23, 2015We think that TLT can move back to where it was before QE started in 2008 - 2009. we seem to be seeing, and may continue to see very choppy and difficult markets to trade or invest in as short-term trends could be much more volatile. We are seeing this in gold, oil, and yes – stocks.The Fred Report - Weekly September 21, 2015Stocks had a volatile FED week, and it looks to us as if the market should start to decline in a retest of the August low. Gold is looking a bit more positive, with a month-end close in this general price area suggesting the possibility of further rally in October.The Fred Report - Mid Week Update September 16, 2015
Stocks are acting about as expected this week, choppy and up and down. Bonds are acting as expected for sure – TYX is rallying as is TNX. While we are not averse to putting some money to work we would be careful about buying in a big way this week.
The bottom line is that the internals have not improved enough to flash an all clear and cautious market participants should still add money to preferred issues and sectors slowly, if at all. What I, (and FRED report clients) care much more about is how the bond market is going to react after the FED meeting.
Weekly momentum indicators are oversold enough to have an up week although the patterns on these indicators aren’t great. Oil and the oil stocks should bounce around a bit – up and down like the market but this is an attractive-looking trading opportunity.
There are more sell signals than buy indications, normal but a concern suggesting this market could be choppy to down for longer than many believe. Starting down towards 182 now would suggest that the first low of this move has NOT been made.
There is enough evidence suggesting another move down that cautious advisors should be selective in here and make sure to leave some money out for a retest. A pullback in Oil that reloads the daily stochastic, without making new lows, would be a welcome here. We feel that Europe has two things going for it at this juncture: it is safer and there may be more upside potential.
The Fred Report - Mid Week Update August 26, 2015Unlike the corrections we saw in 1998 and 2011 we have seen pronounced technical weakness months before the correction started. Realize we may have hit a trading phase where the market opens up and trades down, then opens down and trades up. I call this the “Wubba-Wubba” pattern - lots of volatility but no real net change close to close.The Fred Report - Weekly August 24, 2015
Indicators suggest things can get worse unless this 198 level holds on a closing basis, today. Muni Bond ETFs are trading well and might be a good hedge in this environment. We want to end up with PGJ at the end of this Chinese turmoil as that is the most attractive technical pattern of these units.
Stocks are little changed from last week, as are our views, but there has been some improvement beneath the surface. Bonds look poised to resume their decline in price (and corresponding rise in rates).
We remain with a buy signal and stops below last week’s lows on the indexes. DBC started the week with a bang but has fallen off in sympathy with the drop in oil. It is still holding and unless the low of last week breaks we should see some upside.
The Fred Report - Weekly August 10, 2015We have arrived at a key point on some of the indicators suggesting a rally should begin this week – if not we would become a bit more defensive. We would expect TNX and TYX to be choppy for a week or so, and then rates should start to rise again. Perhaps the most interesting commodity development last week is a short-term trading buy on DBC and for those who have wanted to add this into portfolios and are aggressive this is now finally buyable.The Fred Report - Mid Week Update August 5, 2015We have no changes in our stock commentary, price is holding but internals remain weak, and a break of 204 on SPY would lead to 198.The Fred Report - Weekly August 03, 2015
The market is close to “put up or shut up time”. Commodities in general remain oversold and not reacting well to this condition – a rally could occur at any time but likely some more work in this area is needed.
The Fred Report - Mid Week Update July 29 2015We actually think that the bottom on oil still will be in the vicinity of the March low but that we could bounce around in this area for a while longer.The Fred Report - Weekly July 27, 2015Internals continue to deteriorate, and with the daily stochastic negative as well a test of the recent low at 204 on SPY is likely. Gold has been interesting over the last few weeks, with many down days, and then finally an outside positive reversal day on Friday. Such a day is normally a sign of demand coming into the market and overcoming supply, and exhaustion of selling pressure.
