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.NEW YORK ( The FRED Report) -- Here at The FRED Report, we made a couple of forecasts at the beginning of 2011. We called this our "Fred's Fab Four," and wrote about this for TheStreet.com. Several of these look ready to start to occur. The first forecast was that the second half of 2011 would be stronger than the first, and we have been suggesting we would have a summer rally starting in the June/July timeframe. Recent market action is starting to suggest this. Stocks are up and bonds are down from their highs. The second part of this forecast was that commodities would enjoy a seasonal rally this summer. Until recently, the setup for commodities has been lacking, but this may be falling into line as well. To understand why this is, we show a little history, and discuss some technical theory. When silver declined precipitously in May of this year, we mentioned that the momentum configuration suggested a lower closing low in price (not necessarily a new price low) was needed to complete the pattern. This often takes some time to develop. The example we used was the stock crash in October of 1987, and we noted that the closing low of the move occurred in December and not October. We show that chart below:
We continue to believe energy will perform well this summer - stocks we have recommended are below:
Should the market rally into August (and possibly longer), we believe these stocks will continue to lead, in spite of signs the government is trying to slow the rise of oil prices. Should this continue, these stocks and ETFs should outperform.