Category - Weekly Updates

Market Update: 03-04-19

The Fund is about 90% invested in ETFs and Stocks.  There is about 60% in short-term bond ETFs and about 30% in individual stocks.  I like the Cloud, Healthcare, China and Technology space more than I like bonds at this time.  I am seeing a lot of institutional demand in the Software stocks as companies get out of Local Network Security and into Internet (Cloud) Security.  This is a huge Theme that appears to be spreading fast as companies try to “secure” their data.  Data Security and a transition to 5G Technology is occurring faster that we might imagine, and the companies involved in this “wave” of new innovation have my attention.  I am studying lots of charts and fundamental data seeking to add new positions mainly in the Cloud Security and Software areas. The good news is, there are a lot of fundamentally strong stocks in these areas breaking out of sound technical patterns.  The bad news is, the market is extended and due for a pull-back.

The market trend is still up! I believe this V-shaped recovery is driven by a “dovish” Fed and FOMO (Fear of Missing Out).  The Fed uttered some “hawkish” (higher rates) comments in Q4 and the market proceeded to discount the worse and the market fell over 19% from high to low.  The Fed did an “about-face” and released a “dovish” (lower rates) tone and the market bottomed on 12/24/18 and has since rallied over 19%.  A lot of investors exited the market during that steep decline and now many are coming back in due to a fear of missing out (FOMO).  I would not be surprised to see a quick re-test of the all-time high which is less than 5% away.  This would be typical for a V-shaped recovery as investors rush to get back in.  I can easily see the market digest gains by moving sideways for a bit and I believe that would be very constructive action.  The NASDAQ is up ten weeks in a row, so odds favor a down week is in the cards.

This week will mark the 10th anniversary of the market bottom when the S&P 500 Index bottomed out at “666”.  In Biblical terms, “666” is the “Mark of the Beast” (devil).  Yes, it may have been a devilish scary bottom, but the Fed rescued the market with Quantitative Easing (QE) and lower rates that the market now appears “hooked” on.  I believe that we are still under some form of QE and when the Fed does take his foot off the QE pedal, we will likely have “hell” to pay.  However, we do not appear to be there yet so let’s just enjoy the ride while it lasts.

We are near the end of earning season.  I prefer to not play “earnings roulette” with a stock unless I have a significant profit cushion in the stock.  I typically sell a stock before an earnings announcement because I have seen too many earnings “blow-ups” to ride through an earnings report.  I believe the reaction to earnings are often more important than the earnings itself.  I believe the reaction tends to express what the market was expecting. If the earnings were great and stock prices fall, the expectation was likely for higher earnings. If the earnings were bad but we see rising prices, the expectation was likely lower than expected.  Stocks “gapping” higher after earnings on strong above-average volume could indicate that “big money” wants in and they do not mind paying up.  I like to follow the “waves” that “big money” creates and ride them until they fade.  Currently, I am seeing a lot of “waves” that I want to ride but the “timing” has to be just right.  Patience is a Virtue.

$22 Trillion is a lot of US debt to pay off!  However, the US has about $300 Trillion in assets, and we have a $20 Trillion GDP.  Knock a few zeros of the numbers and a company with $300 Million in assets and a $20 Million Bank Loan (20 is only 7% of 300) may not look that bad. Our Debt/GDP is about 1.2 currently and our Debt cost is about 1.5% of GDP.  This cost is lower than the 3% we had in the 80’s.  I believe the US is in good shape and Trump is trying hard cut a favorable deal for America with China that will make things ever better for America.  

Bottom line: The trend still appears to be up, and I am looking to get more invested in leading stocks under accumulation.  If you like what you are reading, please join me as a shareholder and I promise to manage your money like it were my own.  I wish you well!         

 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 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.

Quantitative Tightening (QT) is a contractionary monetary policy applied by a central bank to decrease amount of liquidity within the economy.

Quantitative Easing (QE) is an expansionary policy aimed at increasing the money supply in order to stimulate the economy.

Investments cannot be made in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Past performance is no guarantee of future results. 

NLD Review Code: 3186-NLD-3/4/2019

Market Update: 02-25-19

The Issachar Fund (LIONX) is about 95% invested in stocks and Bond ETFs.  LIONX has about 60% in short-term bonds and about 35% in various growth stocks.  This is the most bullish I have been all year!  My conviction level has increased substantially as I see more stocks breaking out of sound base patterns on increased volume.  Volume is the heart-beat of a stock but price is everything.  With price and volume on the rise, this tells me that the “big-money” is in the accumulation phase instead of the distribution phase we witnessed in December.  If my current outlook and positions are rewarded, I may employ some leverage but only if conditions remain or improve.  I believe the market was expecting a recession after the Fed indicated in Q4 that they were on “autopilot” with its balance sheet reduction and raising rates.  I believe the market now does NOT expect the Fed to raise rates and the market is cheering a lower rate environment.  In fact, the CME Fed Futures is indicating that rates will remain the same until January 2020.  As a consequence of lower expected rates, some corporate earnings estimates are being revised substantially upward.  After the disappointing statements from the Fed in Q4, earnings estimates were rapidly being revised downward and the S&P 500 dropped over 19% until bottoming on Christmas Eve.  Since Christmas, the S&P 500 is up over 19% and less than 4% away from an all-time high!

All four major indexes are constructively trading above their respective 200-day moving averages (dma).  I had expected the market to consolidate recent gains along the 200-dma, but it now appears that there may be more “gas left in the tank” possibly to test the October highs.  I do not want to doubt the trend so I will ride it while it lasts.  Remember, the trend can be your best friend!

Prior to this past week, there have been 11 straight weeks of stock mutual fund outflows.  If that outflow reverses and “mom and pop” come back in the market, then we could see more upside.  However, the market is extended and could pull-back at any time, but I would view it as a “technical” buying opportunity unless something fundamental changed.  The US and China Trade talks appear to be going in the right direction because Chinese stocks are in rally mode in anticipation of a favorable deal.  Free and Fair trade would be good for both parties.  I believe that China has more to lose so they should have more incentive to come to an agreement sooner rather than later.

Quantitative Easing (QE) is the “invisible hand” that lifts all boats.  QE is a “force” that is hard to track but I usually know it when I see it, like now.  It appears the Fed is being more “accommodative” with QE and the market appears to love “easy money”.  Keep in mind that when QE is removed or reduced, we might get a sneak peek at who is swimming naked.  I believe one should never throw caution to the wind and never ever buy and hold anything because there are no guarantees in the market.  If something sounds too good to be true, well then it probably is.   

Bottom line:  I believe we had a “correction” in a Bull Market.  I do not believe that we had a top in a Bull Market and the start of a Bear Market.  Bear Markets usually occur in a recession and I do not see one any time soon.  My goal is NOT to beat the market but manage the risk and take what the market gives in return.  I do not try to go from 1st to 4th gear.  I tend to ease in and out of the market as I perceive risk.  I try to manage risk and not eliminate or avoid it.  All of my investable assets are in LIONX so I am All In!  

(Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.) 

Health Tip: Harvard University found that patients who were prayed for recovered quicker than those who weren’t, even if they weren’t aware of the prayer.

Inspirational Quote: We all have the power of choice, but every time we make a choice, our choices have power over us.  It Changes US!

Verse of the Day: Walk with the wise and become wise; associate with fools and get in trouble. ­Proverb ­13:20

The chart below shows the net return for the last 12-months of LIONX (red) verses S&P 500 (green).  Note the Return and the Volatility (risk).  I believe that managing risk is the key to long-term success.  Past performance is no guarantee of future results.


Market Update: 02-19-19

The LIONX Fund is about 60% invested!  I am holding positions in the Cloud, Health and Bond space as they appear to be under institutional accumulation.  I am seeing both strong fundamentals (sales and earnings) and technicals (chart patterns) and these “themes” appear to be in favor.  Cloud Computing is storing and accessing data and programs over the Internet instead of your local computer.  More and more businesses are moving to Cloud based services especially as Internet speeds increase (5G) and prices decline.  Historically, Cloud and Health stocks have been very little affected by the China Trade War and if it is resolved shortly, I would still expect “big money” may support these themes.  Bonds are generally doing well mainly because of an anticipated economic slow-down therefore I believe the market does not expect the Fed to raise rates any time soon.  I happen to think the next move by the Fed will be to lower rates.  I am seeking to buy leading stocks on weakness after exhibiting strength with the highest quality fundamentals, exhibiting the most strength in their industry groups.

CANSLIM could be becoming “dated” due to “everyone” having easy access to data and charts.  CANSLIM is a “system” for selecting growth stocks , developed by William O’Neil that has worked very well for many years.  However, I believe that “Systems and Black-Boxes” work until the don’t and no one really rings a bell to say the party is over.  It can be a painful lesson to “learn” that a “system” is “broken” usually because pride tries to keep you in while losses try to take you out.  I still follow the CANSLIM system, but my focus is shifting to more forward-looking metrics like earnings estimates and “new” chart patterns instead of past sales and earnings and base break-outs.  I have learned over the last 29-years that there are no  guarantees in the stock market, and nothing goes straight up.  My advice, listen and obey your God-Given Wisdom and Common Sense when your hear it, or things could get ugly if you don’t. 

The Fed tightened liquidity and raised rates in Q4 2018 and the market dropped over 19% from peak to trough.  This steep decline was halted after the market started discounting dovish (lower rates) comments from the Fed.  It appears to me that the market is addicted to QE.  If/when the market fears that the Fed will resort to some sort of QT then I would expect another sharp protracted decline in the market.  For now, QE is a major “force” in this advance off the 12/24/18 low.  Reality is there will be another steep decline in the market, and no one will ring an alert bell.  I try to stay focused on the bottom line every day in an effort to avoid a life-changing event.  I do not plan to ever buy and hold anything because there is too much at stake if I am wrong.  I believe that risk should be managed and never ignored no matter how old one may be.       

The Big-Three major indexes are all trading above their 200-day moving averages (dma).  If these indexes start dropping back below their 200-dmas, then the rally since Christmas Eve may be in trouble.  Until then, the rally appears to remain in play.  I believe the driving force behind this rally is the easy-money policy by the Fed.  With $22 trillion in national debt, the need for low interest rates simply as a matter of budgetary survival becomes paramount. Don’t forget the Fed Chair who is a savvy business man (not an academic economist) was appointed by Trump and his next move will likely be to lower rates which the market may already be discounting. 

Bottom line: The trend is your friend and the trend has continued up!  Junk Bonds are also trending higher and they have already taken out their October highs and trading near all-time highs.  I believe this bodes well for the market and I expect the indexes may take out their highs as well.  If I am wrong, I will be quick to do what is necessary to minimize risk in an effort to maximize our gains.  I wish you well!         

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 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.

Quantitative Tightening (QT) is a contractionary monetary policy applied by a central bank to decrease amount of liquidity within the economy.

Quantitative Easing (QE) is an expansionary policy aimed at increasing the money supply in order to stimulate the economy.

Investments cannot be made in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Past performance is no guarantee of future results. 

NLD Review Code: 3170-NLD-2/19/2019

Market Update: 02-11-19

The Issachar Fund (LIONX) is about 30% invested in stocks and ETFs.  I reduced exposure last week since LIONX positions were not performing as expected.  I believe “slugging” % is more important than “batting average” so I try to keep my losses small and let my winners run.  I tend to play a little “close to the vest”.  I am seeking stocks/ETFs exhibiting strong relative strength, great fundamentals (earnings and sales) and nice looking technicals (chart patterns).  I believe my “Buy List” is full of potential winners but I am patiently seeking to “buy right” because I feel that is my first line of defense and a major component of sound risk-management.

 

 

The European Union (EU) slashed its GDP outlook for Germany from 1.8% to 1.1% and the Euro Zone from 1.9% to 1.3% for 2019.  This is a huge reduction in growth expectations and may confirm what the bond market has been trying to tell us.  Global growth is slowing and that could mean lower profits for stocks.  US and global bonds across the board have been rising as yields have been falling since October, right after the market peaked. The spread between the 2-year and the 10-year Treasury yields have narrowed to about 16 basis points and could possibly flatten.  A flattening yield curve could be a signal of lower expected slower growth.  If the spread flattens or turns negative, I would not be surprised to see the stock market head lower to test the Christmas Eve low.  The weight of the evidence is confirming my conviction to buy more bonds.  I am in the interpretation business and not the prediction business, but it sure feels like slower growth is on the horizon.

Everything looked rosy last week but my “rose colored glasses” are getting foggy.  The Dow has survived several tests on the 200-day moving average (dma) on pullbacks recently BUT the Dow is the only index to make it through its 200-dma.  The S&P 500 and NASDAQ hit up against its 200-dma where it “stalled and churned” on higher volume.  However, both the NASDAQ and the S&P 500 spent the last half of January consolidating their gains along the 50-dma which may now help them clear the 200-dma.  Time will tell.

I believe the market is still hooked on the opioid of cheap Fed money.  If the Fed were to take away the punch bowl of liquidity/credit, I believe the market would suffer a serious decline for longer than most expect.  Powell is not an economist and Trump is not a politician.  They both appear to be practical business men and they understand how businesses and countries run.  I believe they will do everything in their power to keep this market going in the right direction.  If they do their jobs, then I feel the market will head higher.  However, a small group of people at the Fed (under political pressure) who try to control a dynamic market may fail, no matter how smart they are.  My focus remains on Price and Volume of Leading stocks and the major Indexes.        

Bottom line:  Stocks and Bonds are trending higher and that may mean the Fed is adding liquidity to the system.  If the market can break above its 200-dma on strong volume, then I believe we will head north to test a band of resistance near the October highs which is about 7% away.  I believe that it is more important to stay in tune with the trends instead of understanding why they are trending.  However, it never hurts to Pray for the Gift of Understanding.    

(Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.) 

Health Tip:
Eating unrefined carbohydrates, nuts and bananas boosts the formation of serotonin, another feel-good drug.

Inspirational Quote:

Everything you’ve ever wanted is on the other side of fear.

Verse of the Day:
Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own. Matthew 6:34

The chart below shows the net return for the last 12-months of LIONX (red) verses S&P 500 (green).  Note the Return and the Volatility (risk).  I believe that managing risk is the key to long-term success.  Past performance is no guarantee of future results.

 

Market Update: 02-04-19

My Fund is about 50% invested!  I have been buying stocks and ETFs that appear to be under accumulation with a focus on the Cloud, Health and Bond sectors.  I believe that emerging market bonds could offer a great risk-adjusted return at this juncture.  I am seeking stocks with good fundamentals (sales and earnings) and healthy-looking price and volume chart patterns.  We are in earnings season and many stocks are breaking out to new highs with just a few blowing up after earnings and guidance releases.  I do not plan to hold any stock going into its earnings release and risk a potential “blow up” where a stock could fall in price due to a bad report.  However, stocks can “blow up” for no apparent reason.  The Semi-Conductor Sector produced nice gains last week on strong supportive volume.  I believe this is a good sign that institutions may be coming back into the market.  I plan to add more positions to the Fund as opportunity presents itself.

The Fed released a dovish (low rates) policy statement on Wednesday and the market shot higher in price on above-average volume!  I now have conviction that the institutions “big money” are coming back in this market after being on “pause” since the Fed’s rate hike in December.The Fed mentioned “patience” eight times in its policy statement signaling that it may have raised rates in December prematurely.  The market seems to like the new “tone” of the Fed.  I believe the Fed has re-filled the “party punch bowl” sending a signal to the market that QE is not dead and it is very much still alive.  Not only did the US market suffer steep losses in December (about 15% peak to trough) but global stock markets felt the pain as well.  Stock markets around the globe appear to be addicted to central bank QE and I suspect that it will not be fun to watch when the market is eventually “detoxed”.  We got a sneak preview in December of what the market is capable of when it expects the Fed to tighten liquidity.  The stock market just experienced its worst December in 87 years linked to a “hawkish” (higher rates) Fed tone.  However, we just had our best January in 30 years linked to a “dovish” Fed.  Let’s pray the Fed keeps “cooing” like a dove.       

The S&P 500 and the NASDAQ are trading below their 200-day moving averages (dma).  However, the Dow has broken above its 200-dma and I believe that may bode well for the S&P and NASDAQ doing the same.  The S&P broke its 200-dma and its 50-day moving averages on December 4th  so it will be a positive confirmation if the S&P can break above its 200-dma.  I believe it can.  

Bottom line: I am very impressed with the way the market responded to the Fed’s dovish  comments and I believe we may be on pace to take out the October 3rd market highs. Put your money with my money and I promise to manage them exactly the same!   

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 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.

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 Index is an electronic traded listing of over 5,000 active large and small companies.

Dow Index is the value of 30 large, publicly owned companies based in the United States, and how they have traded in the stock market during various periods of time.

Quantitative Tightening (QT) is a contractionary monetary policy applied by a central bank to decrease amount of liquidity within the economy.

Quantitative Easing (QE) is an expansionary policy aimed at increasing the money supply in order to stimulate the economy.

Investments cannot be made in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Past performance is no guarantee of future results. 

NLD Review Code: 3122-NLD-2/4/2019

Market Update: 01-28-19

The Issachar Fund (LIONX) is 100% in Cash BUT that could change this week.  Just like in real estate where it is all about “location”, the stock market it is all about “earnings”.  This week is like the Super-Bowl of earnings releases with names like Amazon, Apple, Caterpillar, Microsoft and Tesla to name a few.  As quarterly earnings are being reported, management also gives “guidance” on the company’s expected earnings and revenue.  This has the potential to be a “game changer” resulting in higher or lower stock prices so this week could give us clues as to where we are headed.  I believe we may be headed higher, but I rely on the charts to reveal the truth.

The NASDAQ Index has retraced about half of what it lost as it bounces of support at its 50-Day moving average (dma) on good volume.  I believe that it is a good sign to see the NASDAQ and the S&P 500 find support at its 50-dma.  It shows me that institutions are willing to “support” or “buy” the index at these levels in an effort to build investor confidence.  If we have a bad week of earnings announcements and the market breaks the 50 dma on big volume, then we could be headed lower to test the Christmas Eve low which is about 13% lower.  I suspect the 50 dma will “hold the line” because the Fed is likely on our side ready to add liquidity as needed.

Gold breaks out as the dollar declines.  Global economies are struggling to grow, and many are in decline, so I believe there is a concerted effort by central banks to keep the liquidity flowing.  Our Fed seems to be turning more “dovish” (lower rates) every week after it raised rates in December against the market’s wishes.  Gold is trending higher as the dollar declines with the prospect of lower US rates.  I am interested in Gold but don’t yet have enough conviction to buy it but that could change if the market thinks the Fed may be embarking on QE4.  I believe that QE and the flow of “free money” has been the life-blood of the market since the financial collapse in 2008.  Draining the “liquidity swamp” too fast could have negative economic and political repercussions so I suspect that “free money” is here to stay, at least for a while until the “bubble goes pop”!

Trump ended the government shutdown until at least Feb 15th.  If Congress can not work out a compromise in the next three weeks, Trump will likely shut the government down, declare an emergency and build a wall to protect our southern border.  Everyone I know locks their doors at night to sleep well knowing they have done all they can to protect their family.  Why should we leave our doors open?

Click here for my latest LIONX Fact Sheet

See where Morning Star has placed the Issachar Fund in the One Year rankings of the Tactical Allocation Category: https://Morningstar.com

Bottom line:  I have stocks ready to buy and I am patiently waiting for proper buy points showing institutional demand.  Charts never lie.  They tell the truth about supply and demand in the market and that is where I am focused.  If this V-bottom, buy the dip, QE rally is for real then I expect many great opportunities to follow.  If you like my approach to managing risk/money, put your money with my money in LIONX and I promise to manage them exactly the same!   

(Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.) 

Health Tip:
Don’t brush your teeth immediately after meals and drinks, especially if they were acidic. Acidic foods, citrus fruits, sports drinks, soda can soften tooth enamel “like wet sandstone”.

Inspirational Quote:
If you plan on being anything less than you are capable of being, you will probably be unhappy all the days of your life.

Verse of the Day:
Be an example to all believers in what you say, in the way you live, in your love, your faith, and your purity. ­1 Timothy ­4:12

The chart below shows the net return for the last 12-months of LIONX (red) verses S&P 500 (green).  Note the Return verses the Volatility.  I believe that managing risk is the key to long-term success.  Pictures are better than 1,000 words! Past performance is no guarantee of future results.