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:

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.

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Dexter Lyons