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The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.


The FRED Report

) -- The market has continued to correct as we, at

The FRED Report,

have been expecting.

Should this choppy correction continue into the end of June, there is the possibility of a rally in July and August.

We have been asked if we feel there will be leadership changes and have started to work on this for our

Monthly Sector Report

for our clients, due out next week. We will talk a bit more about sectors in next week's


article. For now, we will talk about leading indices and some attractive

equities that could be bought in the next two weeks.

Breadth indicators have narrowed in recent weeks. It

appears the market may be moving a bit toward large-cap growth and away from the small-cap area

. For this reason, we would look at the DIA and OEF rather than broader indices such as IWM. We show charts of these, below. Readers can see that DIA is the strongest, and OEF is slightly stronger than IWM.

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We have also written about how commodities have a tendency to make a low in May and then rally in the summer. Petroleum and agricultural commodities, in particular, have this tendency.

We have two ETFs that take advantage of the move in agricultural commodities, JJG and PAGG. Both of these could rally this summer. A couple of energy stocks that could rally are XOM and CVX

. We show charts of these below.

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At the beginning of April we became concerned that the stock market could have a correction into the May/June time period and so far this has occurred.

As of this writing, we believe that a rally in July and August is possible.

Obviously, we will advise if there is a strong signal to enter the broader market at the end of June. For now, however, the above-mentioned vehicles seem most attractive. Should the market advance, there should be leadership from these areas generating excess returns to that of the broader market.

Fred Meissner is founder and publisher of

The Fred Report

. Fred is a CMT and past President of the Market Technicians Association (MTA). He recently left Merrill Lynch's Market Analysis Department and Sector Strategy Department to form The Fred Report. A detailed bio is here:

Fred Meissner