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 ...
Yesterday ended the streak of up Tuesdays in the market while last week saw an acceleration in the the “crush anything that pays any sort of yield” theme. Treasuries, high yield bonds, preferred shares, Utilities, REITs, etc. all got killed. At this point this just seems like the weird type of dislocation that happens sometimes in markets where money just doesn’t want to go anywhere except under a mattress. The uncertainty about what the Fed is going to do and when has caused interest rates to spike which complicates their exit strategy and is causing market unease about what they will do next. As long as the Fed is keeping their foot on the gas stocks are still the place to be.
Technically we see key resistance on the S&P 500 at 1648 (currently 1631) and key support at 1612. Recent action suggests that a test of 1612 is likely.
Interesting but Useless Information
Dr. Doom, Nouriel Roubini, went on CNBC the other day and actually predicted 2 years of stock gains. Interesting because he has been predicting disaster. Useless because all of his disaster predictions since the 2008 crash have been wrong and nobody can predict the market.
We have rotated out of all of our fixed rate bonds—Treasuries, Preferred Shares, High Yield, and Emerging Markets. These have been replaced by Floating Rate Bonds, S&P 500, and Cash.
I Need Income From My Investments
I had an interesting conversation with a financial planner about a client who had a portfolio of short term bonds and who “needed” income and had a life expectancy of 20 years. He was wondering how to advise them. What I basically told him was this:
1. Nobody “needs” income, what they need is for their portfolio to provide the freedom to live the life they want to live.