Category - Weekly Updates

Market Update: 06-17-19

The Issachar Fund is fully invested in Muni Bonds with a small allocation to Preferreds.  My conviction level in munis remains high with a moderate level of conviction in Preferred Stock ETFs.  Preferred stocks entitle the shareholder to a fixed dividend, whose payment takes priority over that of common-stock dividends.  Preferred stocks have a historical tendency to do well when bonds and stocks trend higher.  If the preferreds perform as expected, I plan to increase our exposure.  If things do not go as planned, I will not hesitate to do what is necessary to minimize our losses.  Munis and preferreds have, what I feel are, good historical day-to-day serial price correlations and they seem to be working well at this time(Portfolio holdings are subject to change at any time and should not be considered investment advice.)

The market appears to be in a holding pattern, likely in anticipation of this Wednesday’s Fed policy announcement.  Fed CME Futures expect the Federal Reserve to reduce rates 3 times over the next 5 meetings, but they are expecting the Fed to keep rates steady after their 2-day meeting this Wednesday.  There are some expectations of a possible rate cut, and it is not clear what the market will do in response. It could be seen as an admission that the economy is weakening.  If the economy is weakening, then I would expect further rate cuts because I believe the Fed wants to see Trump reelected.  Any hint of a possible recession would not be favorable for Trump in 2020 and I believe the Fed is well aware of that.  Trump was not very pleased with his newly appointed Fed Chair, Jay Powell, when he raised rates in December and the market took a nosedive into Christmas Eve.  Powell all but admitted he made a mistake by raising rates too soon and indicated that he would not be raising rates as expected.  The market welcomed the dovish stance (lower rates) and formed a V-bottom rally into the end of April 2019.  It sure seems to me that the market is addicted to lower rates and any hint that rates will not be declining may not be a welcomed event.  I plan to keep my ears to the ground and my eyes on the road ahead because things could get ugly fast if the notion of higher rates were to creep back into the market.  Yesterday’s return is behind us and tomorrow’s return is all that counts so let’s stay alert and never ever fall asleep at the wheel.

The S&P 500 Index is trading just above its 50-day moving average while the NASDAQ Composite Index is sitting just below its 50-dma. The dollar continues to trend higher and does not seem to be affected by a potential lowering of rates.  I would expect the dollar to trend lower with lower rates but the fact that the dollar is rising tells me that money is likely flowing into the US in search of a higher yielding bond.  Since most of Europe and Japan have negative yielding government bonds, investors seem to be flocking to the US to buy our positively yielding bonds.  I am betting that this trend will continue even though we may be the worst house in a bad neighborhood.  Lookout below if we ever get to a negative yielding US government bond.  I hope to never see it in my lifetime, but I do believe it will happen.             

 But I will bless the person who puts his trust in me. (Jeremiah 17:7)

Bottom line:  I believe the market is stuck in a holding pattern until the Fed decision on Wednesday.  Prudence calls for patience at this time.  Keep your powder dry for the next opportunity and let the charts tell the story.  Good risk management seeks to avoid life-changing loses.               

Investors should carefully consider the investment objectives, risks, charges and expenses of the Issachar Fund. This and other important information about the Fund are contained in the prospectus, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  The prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC.   Horizon Capital Management Inc, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

The Fund may hold cash positions when the Adviser feels that the market is not producing returns greater than the short-term cash investments in which the Fund may invest. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions.  The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results. S&P 500 Index is an unmanaged composite of 500 large capitalization companies. This index is widely used by professional investors as a performance benchmark for large- cap stocks.  NASDAQ Composite Index is an electronic traded listing of over 5,000 active large and small companies. 3441-NLD-6/17/2019

Market Update: 06-11-19

The Issachar Fund is 195% invested with 70% in Muni Bond Mutual Funds, 123% in Muni ETFs and 2% in stocks.  My conviction level in muni bonds increased so I added to our muni exposure via Total Return Swaps.  We have a Total Return Swap agreement with a bank that charges us interest to buy the ETF in their account and we make or lose what the ETF returns.  I like to use leverage on muni and junk bonds whenever they are trending and when I perceive the risk/reward relationship is skewed in our favor.  Muni and junk bonds historically have good day-to-day serial price correlations which basically means the price yesterday tends to be close to the price today and that typically makes for a nice trend.  I also like what I am seeing in my stock Watch List as stocks are breaking out on strong volume which indicates to me that “big money” is coming back in the market.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.  Allocations exceeding 100% result from the use of leverage.)

Trump cuts a deal with Mexico and the market rallies.  Mexico agreed to stem the tide of immigrants crossing our southern border and President Trump agreed to not impose 5% tariffs.  The uncertainty of Mexican tariffs had the market worried about the potential negative impact on corporate earnings, but that concern appears to have  been lifted and the market is greeting the news with a warm welcome.  This has been a news driven market and when the news is perceived as “good”, the algorithmic trading programs (algos) kick in “high gear” and drive prices higher and visa versa when the news is perceived as “bad”.  Yes, there is a lot of emotional (fear & greed) “human” trading in the market but I believe that computers dominate most of our trading today.  Humans are typically slower at reacting to fear and greed whereas algos have no emotion and can change from being bullish to bearish and visa-versa in milli-seconds.  Machines do not panic; they just buy and sell based on the inputs (news) they receive.  Could it be that all the “bad” news is out, and the worst-case scenarios are known?  The one thing that is constant …is change.  I guess we should let go of the past and embrace the “now” because we cannot have yesterday’s return.  I try keep a teachable spirit to learn from my past 29-years of investment mistakes and make wiser decisions that will hopefully lead to profitable investments in the future.  Managing your money is a full-time job and I try to give it my full attention.   

The Jobs Report showed that only 75,000 new jobs were created vs. estimates of 185,000.  It is believed that fewer jobs created will put pressure on the Fed to cut rates which is expected to boost the economy.  The unemployment rate is at a 49-year low of 3.6%.  Of course, this is largely due to the number of low paying temp jobs that are included in the tally.  There are also a lot of people who have given up looking for a job that are not included in the tally.  There are an estimated $10 Trillion dollars of negative yielding government bonds worldwide and that is hard for me to imagine.  Imagine buying a government bond and having to pay them interest to buy their bond, it makes no sense to me.  However, that is reality. I believe there is a lot of money seeking a positive yield and it is finding its way here in the US because our government bond yields are currently around 2%.  As more and more money finds a “happy home” in US government bonds I believe the prices should continue to rise and the yields should continue to fall.  I believe the Fed created an economic slowdown/stock market decline by raising rates in December and now they want to correct their mistake by lowering rates to get us back on track and get Trump reelected.

 Trust in the LORD with all your heart and lean not on your own understanding;  in all your ways submit to him, and he will make your paths straight.  Proverbs 3:5-6

Bottom line:  I believe the V-bottom straight up advance off the June 3rd low may be due for a pull back as stocks appear a bit extended.  The major indexes are now trading above their 50-day moving averages and I believe that is a good sign.  Money is still flowing into the muni bond space and that seems like a good place to be for now.  If I am wrong, I will do what is necessary in an effort to minimize our losses and maximize our gains.  I am All In!   

Investors should carefully consider the investment objectives, risks, charges and expenses of the Issachar Fund. This and other important information about the Fund are contained in the prospectus, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  The prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC.   Horizon Capital Management Inc, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

The Fund may hold cash positions when the Adviser feels that the market is not producing returns greater than the short-term cash investments in which the Fund may invest. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions.  Use of leverage can magnify the effects of changes in the value of the Fund and makes them more volatile. The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results.     NLD Code: 3429-NLD-6/11/2019

Market Update: 06-03-19

The Issachar Fund holds 165% in Muni Bond Mutual Funds (70%) and ETFs (95%).  I purchased more municipal (muni) bond ETFs last week due to the accelerated price slope I am seeing in the muni space and the continued price deterioration exhibited in the stock market.  We are using leverage because I feel the potential gain from a continued uptrend in muni bonds outweighs the cost of leverage.  Muni bonds have historically produced good day-to-day serial price correlations and I find that very attractive in this market environment.  Muni bonds are historically issued with lower interest rates when compared to government bonds because muni bond interest is tax-free on the federal and state level.  Muni bonds are often considered a safe-haven low default-risk type of investment.  Since muni bonds appear to be under accumulation, what is the market trying to tell us about the future of the stock market?  (Portfolio holdings are subject to change at any time and should not be considered investment advice.)

The 10-year Treasury Bond Yield (2.21%) dipped below the targeted Fed Fund Rate (2.25%).  I believe the market is trying to tell us that we are headed for a global economic slow-down.  The market historically discounts the future by taking what is known today and forecasting what it sees in the future.  Normally, the market does not like uncertainty and the ramifications of an escalated trade war may be too hard to predict so there seems to be a flight to the safety of government bonds.  The market was worried about a China Trade Deal in December and now it is actually worse than it was near the Christmas Eve low.  Perhaps, the stock market will grind lower to test that December low?  This is why I do not advocate a buy and hold (hope) strategy but a flexible and opportunistic approach that flows with the market.  30-year mortgage rates have also declined indicating that it sees an economic slowdown or deflation as well.  Maybe the market is trying to tell the Fed to cut rates before the economy slides into a recession.  A recession could ruin President Trump’s chances of reelection in 2020.  I believe Trump understands the economic and political implications of an extended trade war or recession and he will do what is necessary to get reelected.  However, it may get worse before it gets better in the stock market.  If things get worse in the stock market, then I expect the muni and treasury bond markets to do well if money moves from stocks to the safety of government bonds.      

President Trump promised 5% tariffs on Mexican imports ratcheting up to 25% each month if Mexico does not slow the flow of immigrants coming to the US from Mexico.  I believe Trump is doing what he feels is necessary to protect America from serious consequences of an invasion of immigrants into America.  Could it be that the democrats are against the wall and silently welcome an invasion to potentially overwhelm our system and throw American into a recession to better their chances of winning in 2020?  I sure hope not but it is plausible.  Term limits might fix a lot of our problems and get rid of career politicians on both sides of the isle that seem to do what is best for them and less so for us.  Could it be that Trump is hated so much by so many because he is not your typical politician attempting to pay back the special interests that got him elected?  Trump is not part of the good-ole-boy network and that is why I think he will be very effective for America.              

Now faith is confidence in what we hope for and assurance about what we do not see.  Hebrews 11:11

Bottom line:  I believe the 10-year treasury bond figured out that we were headed for an economic slowdown in early October as yields peaked near 3.2% and bond prices continue to advance to about a 2.1% yield today.  That is over a 30% decline in yields in about six months and the yield decline does not appear to be over.  All major indexes are now below their 200-day moving averages and mired in a correction.  I believe the prudent thing to do is sit patiently in muni bonds until stocks come back in favor.  If I am wrong, I will not hesitate to do what is right.         

Investors should carefully consider the investment objectives, risks, charges and expenses of the Issachar Fund. This and other important information about the Fund are contained in the prospectus, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  The prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC.   Horizon Capital Management Inc, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

The Fund may hold cash positions when the Adviser feels that the market is not producing returns greater than the short-term cash investments in which the Fund may invest. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions.  The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results.     3407-NLD-6/3/2019

Market Update: 05-28-19

The Issachar Fund holds 115% in Muni Bond Mutual Funds (70%) and ETFs (45%).  The stock market peaked on October 3rd and High Yield Muni Bonds bottomed on October 10th and they have been trending higher (double-digit annualized rates) ever since.  Maybe the bond market was predicting that if the Fed raised rates like they indicated, the economy would slow and low and behold, I think the bond market was right. The Fed raised rates in Q-4 and the stock market dropped about 19% while the munis continued to attract money and trend higher.  Munis have historically been a low-volatility asset class and I like that because their trends tend to persist.  Low volatility trends that persist like junk bonds (not currently doing well) and munis has allowed us through the years to generate return relative to the risk we are taking.  I have conviction in this muni trade, and I plan to stay as long as we are being rewarded.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.  Allocations exceeding 100% result from the use of leverage.)

All major stock market indexes are now trading below their 50-day moving averages (dma) which could mean trouble for the stock market.  The major market indexes remain in a three-week downtrend (lower lows and lower highs) “correction” from their early May highs. This is the deepest correction since the market rally began in late December, so we need to discern what the market is trying to tell us.  The semi-conductor stocks were leading the stock market higher, but they have certainly run out of gas as they have shed over 15% since their peak on April 24th.  The small-cap Russell 2000 Index (R2K) is trading below its longer term 200 day moving average (dma) and that indicates to me that risk is “coming off”.  A “risk off” market simply means that money is coming out of the risky stocks (R2K) and into more “safe” areas like government bonds.  Muni bonds tend to be lower yielding bonds issued by city and state government municipalities that pay lower interest rates, but their income is tax free.  If risk is “coming off” and the economy does slow then I would expect bond prices to rise and yields to decline further.  As I see things today, the stock market is expecting the economy to slow, and “big money” is flowing out of stocks and into bonds.

China is smart but I believe Trump is smarter.  Trump wrote “The Art of the Deal” and I see him as the best negotiating President America has ever had.  Yes, America may endure some economic pain in the short-run, but I believe we will be better off in the long-run if we trust the process.  It seems un-fair for our so-called trading partners to outright steal our “intellectual property” to copy it then sell it to the world at a lower price.  I believe the theft of American ingenuity stifles America entrepreneurship and I am glad someone is finally standing up for what is right in America.  China sees that the trade war may be causing our stock market to decline, and their market is hurting as well but they might feel they have leverage.  Therefore, I believe that China does not mind inflicting collateral damage on their people if they get what they want.  In my experience, the US tends to live in the present and many of our decisions are made to get the maximum benefit today.  I feel China is much better at looking into the future.  I believe that Communist China is willing to keep this “trade war” alive until 2020 in hopes that Trump will lose reelection and they will get their way again with a Democrat President.  I also believe that Trump knows this, and he will do whatever it takes to get reelected, so I believe America wins and China loses in the end.            

For God hath not given us the spirit of fear; but of power, and of love, and of a sound mind.  2 Timothy 1:7

Bottom line:  I believe risk is elevated due to the “trade war” with China and it may continue until the 2020 Presidential Election.  I believe we need to be patient and sit quietly in muni bonds until the tide changes.  If I am wrong, I will not hesitate to do what is necessary to achieve our objective.  Investors who have a mandate to always stay invested in stocks, may experience “death by a thousand cuts” until the market has done what it needs to do.     

Investors should carefully consider the investment objectives, risks, charges and expenses of the Issachar Fund. This and other important information about the Fund are contained in the prospectus, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  The prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC.   Horizon Capital Management Inc, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

The Fund may hold cash positions when the Adviser feels that the market is not producing returns greater than the short-term cash investments in which the Fund may invest. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions.  The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results.    

Russell 2000 Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index.  NLD Review Code:  3395-NLD-5/28/2019

Market Update: 05-20-19

The Fund holds 15% in Muni Bond ETFs and 85% in Cash.  I like what I am seeing in the muni bond space, especially high yield muni bond ETFs and mutual funds.  I added two muni ETFs as a starter position with plans to possibly add more if things work out the way I anticipate.  I typically “test the waters” with small positions and if they “work” then I try to add bigger positions as I get more conviction in the trade.  On a risk-adjusted basis, the muni bond sector looks attractive at this juncture in anticipation of a slower economic environment.  According to fund tracker EPFR Global, investors pulled $19.5 billion out of global mutual funds and ETFs in the week ended May 15, while bonds added $5.1 billion for their 19th week of inflows.  There is the potential for the stock market to make lower lows.  However, I believe that we are one tweet away from a rally or one tweet away from a sell-off, so stay alert.      

Chinese trade tensions have not eased and may have gotten worse.  Trump feels that he is in the driver’s seat when it comes to trade negotiations with China and sometimes, he pushes the envelope …because he can.  However, China sold the most Treasuries in almost 2.5 years in March, offloading over $20 Billion taking China’s Treasury holdings to $1.12 Trillion.  I believe the Fed will buy whatever China sells so I am not too concerned about China selling US Treasuries unless they start dumping then I will become more concerned.  I also believe Trump generally wants the best for America and he is will willing to stick his neck out, just a bit.  It does not seem fair to hard-working Americans who spend money and take risks to bring a product to market to have the Chinese or anyone else steal their intellectual property.  They often duplicate the American product overseas and sell it at a lower price.  It’s believed that this has been going on for many decades and I am glad that someone is finally standing up for America.  Now this trade dispute may incur some pain on both sides, but I believe it is worth it for our economic health in the long run.  I also believe that any economic weakness could be met with more Quantitative Easing (QE) by the Fed.  The Fed has the ability to buy bonds with money it creates out of thin air (QE) in an effort to add liquidity to the markets in hopes of stopping a decline or stimulating demand.  If one looks under the hood and understands how the system really works, it can be a scary scene.  So, let’s pretend all is well and not peak under the hood, okay?  I believe that one day there will be a stiff price to pay for all of this fiscal irresponsibility, but I do not see that happening in the next year so let’s enjoy the ride while it lasts.  However, one should never fall asleep at the wheel and ignore the flashing signs of higher risk.                

The semiconductor stocks were leading the market, but they have turned south.  Semiconductor stocks have historically been a barometer for the health and direction of the market, and they were trending higher up over 45% since the Christmas Eve low.  However, the semiconductor stocks are now trending lower and they are down over 10% since peaking at the end of April.  Risk is high of a further continuation of this down trend.  The NASDAQ, S&P 500 and Russell 2000 Indexes are all trading below their respective 50-day moving averages and that confirms to me that risk is high.  I have learned over the last 29-years of managing money that there are times to be invested and there are times to not be invested.  I believe that cash may be a good place to be right now. 

Bottom line:  I believe the market is the sum total of the collective mindset and none of us is as smart as all of us.  The market is always trying to send us a message and I believe the message is …stay out.  When the market sends a different message, I hope to be able to take advantage of the opportunity but for now, the market does not seem to be rewarding risk-takers.  I am graciously optimist looking at the glass as half-full, but I see the glass as half-empty today but that could change.  When I perceive that the market will reward me for taking risk, I plan to seize the opportunity.  Gratitude leads to optimism, and I believe a positive attitude is 90% of the game.

All this is for your benefit, so that the grace that is reaching more and more people may cause thanksgiving to overflow to the glory of God.   2 Corinthians 4:15

Investors should carefully consider the investment objectives, risks, charges and expenses of the Issachar Fund. This and other important information about the Fund are contained in the prospectus, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  The prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC.   Horizon Capital Management Inc, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

The Fund may hold cash positions when the Adviser feels that the market is not producing returns greater than the short-term cash investments in which the Fund may invest. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions.  The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results.    

S&P 500 Index is an unmanaged composite of 500 large capitalization companies. This index is widely used by professional investors as a performance benchmark for large- cap stocks.
Russell 2000 Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index.
NASDAQ Index is an electronic traded listing of over 5,000 active large and small companies.    NLD Review Code: 3385-NLD-5/20/2019 

Market Update: 05-13-19

The Fund holds 100% in short maturity cash equivalents.  Cash is a position!  I sold all stock positions last week as the market declined following a Trump Tweet promising to raise tariffs on Chinese imports by Friday if the Chinese did not give into his demands.  The market lost about 2% last week.  When the market is not rewarding me for taking risk, I prefer to reduce exposure or simply step aside and let the market do what it needs to do.  Imagine doing a planned retreat to hilltop on a battlefield to get a better view of what you are up against.  Once we clear our minds and get a vision of where we are headed, then we can plan our attack.  In a sense, going to an all cash position allows me to clear my head and refocus on my objective.  Once I am convinced the market may reward us for taking risk, I will carefully reenter the market.  However, most of the previous stock leaders are not acting like leaders so I will patently wait for the leaders to show me they are ready to “act right”.          

The S&P 500 Index futures are pointing to about a 2% decline on Monday morning.  Tensions with Iran and potentially more Chinese tariffs seem to be spooking the market at this time.  The market traded lower last week on a sell-the-rumor; buy-the-news bounce-off-support reversal-rally on Friday.  We could see the Chinese retaliate; however, they import far less from us than we import from them so they would likely feel more pain in a trade war.  If this uncertainty starts to weigh on a lukewarm U.S. economy, the Fed may step in and lower rates.  At this time, the positive market turnaround on Friday looks like it will be challenged.  There is certainly a lot of uncertainty in the market and the market does not appear to like it so cash may be a good place to be for now.    

The Put/Call ratio spiked above 1.11 which is the highest level since the December lows (blood in the streets) which marked the bottom on Christmas Eve.  The Put/Call ratio measures the number of Puts (bearish bets) versus the number of Calls (bullish bets) and it is viewed as a contrarian indicator.  In other words, there are more people betting that the market will go down than up.  What if they are right this time and the market does head lower?  Time will tell.  I am in cash because the market was not rewarding me for taking risk and therefore, I believe the market will head lower in short order.  However, I remain humble and ready to admit when I am wrong and hopefully learn valuable lessons, so I do not repeat my mistakes.

It is estimated that three-fourths of the global economy as measured by GDP will experience a slowdown this year.  Smartphone shipment volumes (a key metric) were down 6.6% YoY in 1Q19 according to International Data Corporation (IDC).  Apple and Samsung recorded their sixth consecutive quarter of declines with the slowdown accelerating.  Since microprocessor chips are at the heart of these devices, that may explain why the semiconductor sector has not been doing so well lately.  If the semiconductors do not hold support and roll over, then I suspect the market may follow suit.  Further trade war China retaliation will likely escalate so I am keeping a close eye on China and how they respond.  Trump threatened to slap 25% tariffs on the remaining $325 billion of imports currently untaxed on top of the $200 billion that were tagged on Friday.  If China responds by raising its weighted tariffs on $60 billion of U.S. goods to 15% from the current 7%, that could reduce U.S. GDP by 0.1 percentage point.  I believe that it would be wise for China to give into our demands otherwise they may suffer more in the long run.  I am glad that someone is finally standing up for what is right for America!        

Bottom line: We may have seen the top in the market, and we may have to test a lower low which would put the market in a confirmed down-trend.  Do you have an exit plan for your assets, and will you stick to it if your line-in-the-sand is crossed?  The market does not have to go up because it always has.  The only constant in the market is change.  What would you do if your account declined 25% to 50% or more?  Would you ride it out or would it cause a life-changing event? Plan for the worst but hope and pray for the best.                                   

Plans fail for lack of counsel, but with many advisers they succeed.  Proverbs 15:22

Investors should carefully consider the investment objectives, risks, charges and expenses of the Issachar Fund. This and other important information about the Fund are contained in the prospectus, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  The prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC.   Horizon Capital Management Inc, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

The Fund may hold cash positions when the Adviser feels that the market is not producing returns greater than the short-term cash investments in which the Fund may invest. There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions.  The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results.  Past performance is no guarantee of future results.    

S&P 500 Index is an unmanaged composite of 500 large capitalization companies. This index is widely used by professional investors as a performance benchmark for large- cap stocks. NLD Review Code: 3371-NLD-5/13/2019