Market Update: 08-15-33

The Issachar Fund is about 63% invested in fundamentally and technically sound stocks in the top sectors. I added to our positions because the leaders have been leading the rally. I am seeing a ton of leading stocks breaking out of bases on big volume, which is a sign of institutional demand. I try to follow what the smart money is doing because they create the trends/tide that lifts many boats. The market likes liquidity, and with the two new tax and spend bills just passed, about 1 trillion of new money will need to find a new home. The inflation rate came in at 8.5% (year-over-year), less than the prior month’s 9.1% annualized rate. The market cheered this potential peak in inflation. Keep in mind that Biden has been releasing oil from our strategic petroleum reserve, increasing supply to bring gas prices down, which seems to be working in the short run. Regardless of the reason for the market’s advance, it appears to be sustainable, possibly into the November elections. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)

Tidbits: The US savings rate went from 8.7% in December to 5.1% at the end of June, as Americans save less and spend more. Mark Zane, president of the Nevada Association of Licensed Repossesses, said they took in an average of 15,000 repos/day. Argentina’s central bank raised rates to 69.5% to combat inflation above 70%. The S&P 500 and NASDAQ indexes are approaching resistance at their 200-DMA, but the Russell 2000 Index has already crossed its 200-DMA. A promising sign this rally has legs.     

Last week, the Fed INCREASED its balance sheet by $4 billion instead of another slight weekly reduction. The Fed may understand how to achieve an economic soft landing by tapping the brakes on interest rates and taking its foot off the gas of liquidity. I believe the Fed will raise rates again in September to quell inflation. The Fed could cruise into the November elections by stepping on the gas of liquidity as needed to juice the stock market and keep investors happy. I pray that we get an overwhelming number of God-fearing, fiscally responsible leaders in November to unite us so we can honor Him with all we have.       

Bottom Line: I am more optimistic now that leading stocks are leading the rally on big volume. I plan to get more invested this week as I find pivot points of entry in leading stocks. If the market experiences some unexpected heavy selling, I plan to hedge by shorting an index. I have not been this bullish all year so let’s hope I am right and thank God for his wisdom and blessings. Grace & Peace to everyone!

Links: Fact Sheet, Performance, Blogs, Strategy, My Story, Docs, BRI

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Dexter Lyons