Market Update: 07/16/18

Please click here to see the LIONX 2nd Qtr Fact Sheet

The Issachar Fund (LIONX) is 43% invested as of Thursday, July 12, 2018.

LIONX holds ETFs in these themes: 20% in Health Care, 18% in Small Cap Growth and 5% in Online Retail ETFs. These three areas have seen price increases along with volume gains in recent weeks. Once I have conviction that the market is poised to head higher such as now, I scan hundreds of ETF and Stock charts looking for rising price trends confirmed by rising volume. Big above average volume price increases indicate to me that big (smart) money may be flowing into an area that I should pay attention to. I also try to stay away from big above average volume price declines (i.e. Gold and Silver) as that may indicate institutional distribution. I do not try to predict how the fundamentals will impact prices six months from now like some of the big institutions. I try to ride the up-waves that big money creates when they decide to move in or out of a particular area. The smaller a mutual fund, the nimbler it tends to be when moving in and out of positions verses a larger fund. Large ships take more time to turn than a small boat. LIONX could be considered a small boat today but one day it may become a freighter.

The Cumulative Advance-Decline line of advancing stocks minus declining stocks continues to trend higher indicating strong internal strength. The New York Stock Exchange Composite Index which is an equal-weighted representation of the stock market continues in a Trading Range since January. In spite of the Trade War fears, the market keeps bouncing back after each retaliatory action. I believe this market resilience is very encouraging. I am cautiously optimistic that stocks will break out of this trading range, possibly after 2nd quarter earnings are released.

There are certain pockets of strength that I find attractive on a risk-adjusted basis namely: Health, Technology and Growth. It also appears that money is coming out of Value and into Growth which may be a good sign as risk is bought instead of sold. Banks and Emerging Markets appear to be having a hard time advancing so I am not interested in those sectors currently.

Bottom Line:
The water is a little warmer than last week so maybe now is a good time to stick one foot in the water with hopes of getting both feet in soon. If I am wrong, I will not hesitate to do what is necessary to hedge or sell positions in order to protect our gains.

(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.)

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Dexter Lyons