The Fred Report - Sector Review February 2014SPY has been volatile, but ultimately flat, since the last report. We had a sharp pullback and upgraded our market view to neutral from neutral/defensive in our U.S. stock portfolios as the market fell. Once again, the market fell just over half of our projected decline before stabilizing, and this has relieved the pressure on long term momentum indicators but has not helped sentiment much. Advisors also should have added some cash – but we still have some “firepower” to add on the next drop.The Fred Report - Sector Review January 2014SPY had a “Santa Claus” rally but has been flat since then. Sentiment indicators continue to be weak. Our current market recommendation is still Neutral/Defensive and we advise having some cash and also a sell list.The Fred Report - Sector Review December 2013We remain happy with our favorite overweight, XLI. Accumulation models on this and to a lesser extent IYW (Technology) are much better than the consumer sectors. This suggests that we could see a “tired consumer” spending less, with increased business spending, in the first part of 2014. Our under weights are a mixed bag. XLY (discretionary) remains a solid up chart, but with signs of internal weakness, while IYZ has weak accumulation models and a faltering chart.The Fred Report - Sector Review November 2013Since the last sector review, SPY has advanced. Sentiment indicators continue weak. We were looking for a market correction in October, and moved our timing models to neutral as at the recent low we had corrected around half of our expected 7 – 12% pullback. In last month’s Sector Review we noted markets looked better going into fall but the October rally was a surprise and has made long-term indicators look worse.The Fred Report - Sector Review October 2013Since the last sector review, SPY has continued to consolidate. At this writing, the SPY is less than two points from July’s close, which was less than a point from September’s close. Our belief that the first half of 2013 will be stronger than the second has been working so far. Things look a little better going into fall, but there are enough signs of weakness that we do not want to “throw caution to the winds”.The Fred Report - Sector Review September 2013Since the last sector review, the SPY has continued to consolidate. At this writing, the SPY is just two dollars higher than July’s close. We still believe the first half of 2013 will be stronger than the second, and economic numbers around the world are mixed. Last month we made some changes in the Sector Weightings designed to position these models for a yearend rally after an October/November correction.The Fred Report - Sector Review August 2013Since the last sector review, the SPY has continued to consolidate after exceeding our objective of 156 - 161 for the rally that we have held since fall 2012. We still believe the first half of 2013 will be stronger than the second, and economic numbers around the world are mixed. We have made some changes in the sector weightings, which may be a few weeks early. The Fred Report - Sector Review July 2013Since the last sector review, the SPY has continued to consolidate after exceeding our objective of 156 - 161 for the rally since fall. We still believe the first half of 2013 will be stronger than the second, and economic numbers around the world continue to show evidence of a slowdown. Defensive sectors had big runs in the first half of 2013, which implies sector rotation if the market continues to advance after June.The Fred Report - Sector Review June 2013Since the last sector review, the SPY has started to consolidate after exceeding our objective of 156 - 161 for the rally since fall. Defensive sectors have had big runs in the first half of 2013, which implies sector rotation if the market continues to advance after June. XLE could be the main beneficiary of this for both seasonal and economic reasons.The Fred Report - Sector Review May 2013Since the last sector review, the SPY has exceeded our objective of 156 - 161 for this rally, but by less than 4%. Sentiment models have gone negative. However, other technical measures have not yet begun to deteriorate as they would in a major topping configuration. While it continues to look as if the first half of 2013 may be stronger than the second, for this rally to continue at the same rate we should see some improvement in economic numbers. This implies sector rotation and XLE could be the main beneficiary of this for both seasonal and economic reasons.The Fred Report - Sector Review April 2013Since the last sector review, the market and SPY have reached our objective of 156 - 161 for this rally. Economically sensitive indexes have improved, with the exception of XLB. It continues to look as if the first half of 2013 may be stronger than the second. The Fred Report - Sector Review March 2013Since the last sector review, the market and SPY have reached our objective of 156 for this rally. Economically sensitive indexes have improved, with the exception of XLB. We have made selective stock changes to position us more defensively. It continues to look as if the first half of 2013 may be stronger than the second, so we are a bit more cautious and some adjustments seem prudent. The Fred Report - Sector Review February 2013Since the last sector review, the market has continued the January rally. Most important, economically sensitive indexes have improved. We have made some changes to position us more aggressively, and it continues to look as if the first half of 2013 may be stronger than the second, so no real changes are needed in this report. We continue to believe that some fairly large sector rotation could occur in 2013, and so far this is occurring.The Fred Report - Sector Review January 2013Since the last sector review, the market completed the forecast fall correction. Prices tested near support areas and rebounded sharply. Most important, economically sensitive indexes have improved. These changes are designed to position us more aggressively, and it now looks as if the first half of 2013 may be stronger than the second. Last month we mentioned that some fairly large sector rotation could occur in 2013, and these changes may just be the start of our positioning.The Fred Report - Sector Review December 2012
Since the last sector review, the market embarked on the forecast fall correction. Prices tested near support areas and rebounded sharply, and there has been deterioration in most technical indicators. Last month we mentioned that some fairly large sector rotation could occur in 2013, and that we have a “hit list” of sectors. We will change some sector weightings, but realize this is aggressive and may be early – trade carefully.
The Fred Report - Sector Review November 2012
Since the last sector review, the market has embarked on the forecasted fall correction. Prices tested near support areas and are rebounding sharply, and there has been deterioration in most technical indicators. Sentiment remains intermediate-term positive. Weekly stochastics have come down, while dailies are oversold, in most instances. This indicator configuration often means a choppy correction, and this is what we expect from here on out – the “bobbing cork” alluded to in prior reports. We expect some fairly large sector rotation to occur in 2013, and have a “hit list” of sectors, but do not want to make definitive changes until 2013.
The Fred Report - Sector Review October 2012
Since the last sector review, the market advanced on QE3 news, and has retraced much of that advance. Prices are choppy, and there has been deterioration in most technical indicators. However, sentiment remains intermediate-term positive. In last month’s review we questioned whether a period of quick sector rotation had started. It now appears that this is not underway, but we do expect this to occur in 2013.
The Fred Report - Sector Review September 2012
Since the last sector review, the summer rally closed in our target area of 140 - 143. After a period of consolidation, the market “changed character” as noted in our September 4th report, and has rallied sharply while showing some sector rotation. If we are making a mistake in this report, it is to maintain current positioning and not to make changes. We looked at several changes but models do not quite support this – but will tell you the change we would have made is to equal weight XLP and overweight XLY. Aggressive traders take note!
The Fred Report - Sector Review August 2012
Since the last sector review, the summer rally has moved into our target area of 140 - 143. We expect this move to continue into the end of August, and it could trade higher than 143, but we continue to see signs the market is narrowing and advocate a touch more defense moving into the fall months, as well as the early part of 2013.
The Fred Report - Sector Review July 2012Since the last sector review, the stock market has started a slow summer rally. So far this is a textbook move, with the lowest closing low for several months before in May, and should July close higher than June that could be it for the upside.
