The Fred Report - Weekly June 1, 2015Small cap stocks have not registered new highs since April. These indexes often lead the markets so this performance is a concern.The Fred Report - Weekly May 26, 2015First, we have recommended holding a cash position to deploy should the market correct. Second, we have advocated investing new money in models – but more slowly than usual as there could be a good opportunity to accelerate that investing over the next several months. We are seeing signs that the seasonal bottom in agriculture is not going to hold this year.The Fred Report - Mid Week Update May 20, 2015XLF had a good day and we expect more upside. This is still a second half story for us but we like the looks of this setup.The Fred Report - Weekly May 18, 2015
If the market pushes to 214 – 215 on SPY without strong improvement in breadth we would have real concerns – to the point of advocating short sales on a decline back below 210. We would have a position in GLD, not a big one – but we would be hanging around and ready to buy more.
Technical indicators support some sort of bounce here for TLT, and 124 – 127 are possible. Stocks still look they can correct into June/July, and indicators continue to weaken.
This market is a prime example of what we call going aggressively nowhere, and while we still expect 214 – 215 to be challenged before a pullback and advocate putting money into models, we would slow our rate of investing a tad to see if we can add money on a decline. Financial stocks generally outperform in periods of rising rates, and when we look at XLF and a couple of key stocks in particular we can see evidence of this.
Sentiment indicators and some of the momentum indicators we follow have continued to deteriorate. TLT had a bad week last week and it may be that the Treasury market is anticipating a rate rise in June. We would love to get additional GLD should this fall to 109, and then rebound back above 112.
Stocks are continuing to advance and we are moving closer to the 214 to 215 area on SPY that we thought might be tested before corrective behavior occurs. QQQ below 104 targets below 100 and would be a concern, and ONEQ below 189 – 187 would also be a concern and we show daily and weekly charts, below. We note Apple (AAPL) reports after the close and will impact trading in QQQ and ONEQ.
Stocks had a bad day Friday, failing at the 210 – 212 area on SPY and pulling back once again. This area is resistance and the daily stochastic is turning negative on this movement. We prefer to use our SPY support levels of 204, then 198 as areas of support. If these break, then a decline could be violent due to low bearish sentiment.
We do expect one more good shot up to new highs on the dollar, even if they are just intraday highs. Alcoa has satisfied the downside projections we made, and should rebound.
Stocks are interesting here. Longer-term indicators remain precariously placed, but short-term indicators suggest a bit more rally as daily stochastics are trending up, although in the 70’s. If the Euro is going to put on another leg down, now is when it should occur.
The Fred Report - Weekly April 6, 2015We certainly can see the chance for further correction, but in order for this to happen we need to see SPY close below the 204, then 198 area. Oil stock ETFs might be worthwhile investing in slowly, as these could perform well in a market correction, and strongly if there is no correction, or off the bottom of a correction if there is one.The Fred Report - Mid Week Update April 1, 2015
While this is less conclusive than we would have wished our overall conclusion is that stocks should rally for the first part of April but after that we have concerns. Indicators here suggest a fairly substantial rally in the oil whether or not this is the ultimate low.
How we close the Quarter will determine what our forecast is for the remainder of the first half of 2015. Below 205.54 and our forecast for a down quarter will be satisfied, while above that number would strongly suggest a decline into the May/June timeframe. JJG has got strong bottoming signs.
The most important part of our forecast is an up close to this quarter, i.e. above 205.54 on SPY. TLT has finally rallied to the 132.50 area we have been forecasting for this rebound, and traders should start to sell between here and 134.
The Fred Report - Weekly March 23, 2015We still see some market turmoil and the chance of a correction in the second quarter but probably in the May – June timeframe. Although various oil ETFs have what look like tradable bottoms on the daily charts, our forecast is for a new monthly closing low to end the decline and create a strong investment opportunity in Q2.The Fred Report - Mid Week Update March 18, 2015Targets for the week have almost been hit at 209 to 210 and will not be raised. Daily stochastics are, once again, in buy mode suggesting some more rally is possible. We could also see one more sharp drop in the whole metals complex and we would look to buy that – in other words we would hold off on adding to positions here.
