09-16-2020: Uncle Sugar Not Enough

Year-to-Date Strategy Stats as of COB today:

+ 37.08% : Turner Quant Advantage (TQA)

+ 13.30% : Tactical Growth (TG)

+ 3.73% : Diversified Income (DIS)

+ 17.51% : Aggressive Growth (AG)

+ 4.79% : S&P 500


Today, the Federal Reserve chair attempted to explain everything from race relations to how wearing a mask will improve the economy. I am simply amazed at the depth of expertise that exists this non-government organization. There are just not too many organizations that can write hot checks of any size and the US Treasury will simply give them the cash to cover their overdrafts. Must be nice.


Uncle Sugar (aka, Jerome Powell) announced that there would be no end to the amount of sugar that they can and will put into the coffers of the big investment firms, via "asset purchases" to keep everyone solvent. Not sure how that helps the real, main-street economy, but keeping the bond world from collapsing is a good thing... I guess.


And Jay Powell also inferred that they would not be raising their rates on money held at the Fed by banks overnight. And that, by extension, keeps interest rates next to zero for the next 2 to 3 years (supposedly). That's great news (not) for all the retirees that depend on income from their money markets and CD's. But, it's great news for the US government with regard to retiring the national debt; not that that means anything in reality.


Then, after the seriously obfuscated, in-depth, Q/A that took place during the Fed Chair's podium commentary, the pundits and talking heads all watched with bated breath to see how "the market" would react to more unlimited sugar, fully expecting the market to react favorably to the Fed "doing everything exactly right", as some of the talking heads proclaimed. But, the market did not jump for joy. The market did not run out into the streets with signs proclaiming Jerome Powell as the true savior of the economic world.


I wonder why not...??


Could it be that the market realizes, all too well, that this economy is far from back on its feet and pumping low interest rates and more sugar (aka, quantitative easing) into the bond market is not going to generate a sudden growth spurt in the global, much less, US economic system? Could it be that the market realizes that only a handful of big name companies are propping up this market? Could it be that the market realizes the most (likely) contested presidential election in history is only about 6 weeks away? Could it be that the market realizes the NASDAQ has been the primary driver of the stock market over the past 90 days and the NASDAQ has gotten overbought and was overdue for a correction?


But, none of the talking heads that I had the displeasure of listening to had anything but accolades for king Powell. But... I digress.


Here is where I am and how I am investing in this current market... About two weeks ago, the market data gave us an overbought signal and we went 'mostly' to cash. I then put about 10% of capital in our Turner Quant Advantage and Aggressive Growth strategies into ultra-inverse NASDAQ index ETFs, leaving the balance in cash.


The market has sold off slightly... not a big deal... and it struggled today... again, not a big deal. What IS a big deal is this: The market is NOT indicating that it wants to move a lot higher (Snowflake notwithstanding). Indeed, the data continue to show the data favor a flat to negative trend in the market in the near term.


Right now, the futures are pretty ugly for the Q's, but a lot can happen between now and the open. The short ETFs are looking good if this sell-off in the NASDAQ holds up.


If the market takes a strong turn lower, I will look to put more capital to work into additional shares of our inverse ETF holdings.


But... regardless of anything else, I will be 100% in cash before November 3... That could be a "close your eyes, baby" event... (throw back to Aliens, movie).

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