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Tuttle Tactical Management Weekly Market Commentary

Tuttle Tactical Management, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. You should not assume that any discussion or information contained in this letter serves as the receipt of, or as a substitute for, personalized investment advice from Tuttle ...

03/06/2013

Yesterday saw a new record close on the Dow Jones Industrial Average and a renewal of the panic buying we saw earlier in the year.  While it is great to see that the Dow has retraced all of the losses from the 2008 decline I am concerned about what message will be directed towards individual investors.  The asset allocation/buy and hold crowd will use this milestone to “prove” that markets always come back so that their approach is still valid.  This is true, but it ignores the fact that it took the market almost 6 years to come back and the lost opportunity cost associated with that.

Equity Markets
Our momentum indicators are still extremely bullish on the stock market.  Our positive reading on stocks does not mean that the market is guaranteed to rise from here.  There are still many risks on the horizon (Poor corporate earnings, problems in Europe, slowing economy, partisan bickering in Washington, etc) that could cause a selloff. However, our research suggests that when our momentum indicators are bullish the rewards of being invested outweigh the risks.

In the US we are now heavily weighted towards small cap stocks as they are showing the strongest momentum..  Globally, we continue to favor broad based International Developed Stocks.  Shorter term the market is now looking overbought and we are selling the last of our countertrend positions this morning to go to 100% cash in our shorter term models.

Equity Matrix

 

 

Time Frame

 

 

Market Condition

 

 

TTM Positioning

 

 

Short Term

 

 

Overbought

 

 

100% Cash

 

 

Intermediate Term

 

 

Uptrend

 

 

Fully Invested- S&P 500 & Small Cap

Fixed Income Markets
Our momentum indicators show all areas of the bond market are weakening.  High yield bonds are still the only area we see with any momentum as they can tend to trade more like stocks than bonds at times.

We continue to hold our counter trend position in long term Treasuries.  We understand that over the intermediate and long term Treasuries are probably the worst bet you can make, but over the short term they are looking oversold and have provided protection during selloffs.

Fixed Income Matrix

 

 

Time Frame

 

 

Market Condition

 

 

TTM Positioning

 

 

Short Term

 

 

Oversold

 

 

100% Invested in Treasury Bonds

 

 

Intermediate Term

 

 

Most markets in a downtrend

 

 

1/4 Invested in High Yield Bonds


Top Holdings

1. Small Cap Stocks

2. Cash

3. S&P 500

4. Dividend Paying Stocks

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