Market Update: 07-23-18

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

The Issachar Fund (LIONX) is 48% invested as of Friday, July 20, 2018.

LIONX holds ETFs in these themes: 20% in Health Care, 18% in Small-Cap Growth, 5% in Online Retail and 5% in Large-Cap Growth. Health Care stocks continue to trend higher with relatively modest declines. The Small-Cap Health Care sector appears to be under accumulation and is the most attractive on a risk-adjusted basis.

The Trump Tax Cuts, Deregulation and a strong dollar tend to benefit the Small-Cap stocks more than Large-Caps. However, Trump expressed his dissatisfaction with the Fed raising rates and the dollar dropped hard on Friday which sent the Russell 2000 Index (small-caps) down as well. I suspect Trump’s comments will have a short-term impact on the markets but it will not change the direction and momentum of the trend.

The Fed is trying to raise rates (as commodity prices continue to plummet) because they have artificially kept rates too low for too long. The Fed wants to be able to lower rates to spur us out of the next recession that they will likely create. I know it sounds crazy, but the Fed has the power to expand and contract our economy at will and they can create money out of thin air. Sooner or later, there will be a price to pay and it will likely cause a lot of pain for a lot of people who may be simply buying and holding.

I actively manage the risk in LIONX every day in an effort to avoid life-changing losses and stay invested during major advances. If you know of anyone who might benefit from my strategy, please tell them about LIONX or send me their contact. I would love to have them join me as a shareholder.

The NYSE Index (over 1,900 stocks) is still in a wide trading range for the last three months BUT it is near the top of the range which is very encouraging. The Merrill Lynch High Yield Index is also trading near the top of its trading range. High Yield Bonds give us an indication of investors’ appetite for risk. They are indicating to me that investors are comfortable with taking on more risk. A good GDP number or earnings season (this week) could be the catalyst that drives stocks through this trading-range resistance and I welcome it. If stocks do break through resistance with strong above average volume, then I will try to follow the institutional money making the biggest waves. I try to identify (chart-reading) and ride the big waves then get off before they crash. Managing money is my passion and I have been living my dream since 1990.

I am NOT interested in Agricultural Commodities, Gold, Silver, Oil, Emerging Markets, Real Estate, Treasury Bonds, Japan or China. Currently, I am only interested in things that are trending up. I do not subscribe to the traditional risk management methodology of asset diversification. Managing risk by spreading money over several asset classes does not make sense to me but it works for some people ……. until it doesn’t. I prefer to invest in the areas that seem to be under accumulation and avoid the areas under distribution.

Bottom Line:
The market still lacks big volume (oomph) but if earnings come in better than expected or we get a good GDP number this week, that might be the catalyst to propel the market higher. If that happens, I expect to get more invested. If I am wrong, I will not hesitate to do what is necessary to hedge or sell positions.

Your Best-Interest is My Best-Interest!

(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