Market Update: 11-11-19

The Issachar Fund (LIONX), is about 40% invested in stocks and looking for more opportunities!  The major stock indexes have now all broke out above their ceilings of resistance.  That trend break-out confirmed what I needed to do and gave me the conviction to get invested.  We had been in a wide trading range for the last six months as stocks digested the “ramp up” from Christmas Eve to the beginning of May.  I now believe stocks could trend higher into January.  Consequently, I purchased an equal weighting basket of stocks (40%).  Junk bonds are trending higher albeit at a slower pace nevertheless still trading above their 50-dma.  Junk bonds are telling me that investors have an appetite for risk.  The “slowing” slope of the junk bond trend indicates to me that stocks may offer a better risk adjusted return than bonds at this juncture.  Therefore, my focus is on finding more stocks to buy and avoiding bonds.   LIONX is a BRI, Trend Following, Liquid-Alternative Mutual Fund that is Actively Managing  Risk like a Hedge Fund seeking low-correlation/beta/risk to the stock indexes.  When my Strategy identifies a low risk environment, I seek to invest in junk bonds/growth stocks with strong technical chart patterns and sound fundamentals.  During high risk environments I seek to avoid Life-Changing losses.  The Issachar Fund seeks moderate capital appreciation consistent with capital preservation.  (Portfolio holdings are subject to change at any time and should not be considered investment advice.) 

The Fed futures are now forecasting a 3% chance of a ¼ point rate cut in 30 days!  That is a major shift down in the probability of future rate cuts.  I believe interest rates have put in a bottom and rates will continue rising at least in the near future.  The Fed cut rates three times this year and Fed futures forecasted each rate cut with a high probability of accuracy.  The fact that the Fed futures is now predicting only a 3% chance of a ¼ point rate cut is a huge “red flag” as I now expect rates to drift higher.  I believe we will see a lot of money now come out of bonds and into stocks because rising rates are typically not good for bond holders.  I also expect to see money come out of interest sensitive utilities, realty and precious metals and flow into economically sensitive investments like banks and financials.  As money flows out of interest sensitive investments, I expect that money to find a new home in bank, financials and possibly some energy stocks.  Banks have not been performing well this year as rates were heading lower and spreads narrowed.  However, rates have “ticked” higher and I expect to see banks catch a bid and rise into January.  Banks typically make more money when the spread between the short and long rates widen as they have been doing in the last few weeks.  My watch list is chock full of bank and financial stocks just waiting for the right opportunity to add them to LIONX.  I am looking to diversify stock holdings across several growth sectors. 

I am finding a lot of stocks that have been consistently increasing sales and earnings over the last three quarters and have double-digit next year earnings forecasts.  This is very encouraging to me and I look forward to putting more money to work.  I believe the market is getting less concerned about China trade and higher tariffs, a socialist democrat who can beat Trump in 2020 and a Trump impeachment.  Therefore, I expect stocks to continue higher into this seasonally strong period into the new year.  If I am wrong, I plan to do what is necessary to avoid life-changing losses.            

Bottom line:  I believe QE is still the main driving force lifting stocks higher.  The Fed is buying about $60 billion of bonds every month, which is currently predicted to continue until at least March of next year. The market is telling me that the future could be bright for economically sensitive stocks but not so bright for interest sensitive bonds.  If you invest with me in LIONX, I promise to treat your money like my very own.  Thanks for Your Trust and may God Bless You and Your Loved Ones!               


Here is a link to the latest
3rd Quarter Issachar Fund Fact Sheet

Member organizations: KA, NACFC, CIF, OSC, NAAIM and here is a podcast link to my interview on The Real FBI.       

Biblical Responsible Investing (BRI) is the term used to describe the activities of Christian investors who purposely align their investment choices to support their Christian beliefs. The Fund is ESG (Environmental Social Governance) conscious, pro-life and pro-family and will not invest in securities with a negative InspireImpact Score.     

May the God of Hope fill you with all Joy and Peace as you Trust in Him, so that you may overflow with Hope by the power of the Holy Spirit.  Romans 15:13

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 Adviser feels that 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.  If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss.  The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments.  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.  Past performance is no guarantee of future results.  If the Fund’s uses hedging instruments at the wrong time or judges market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss.  The use of leverage can magnify the effects of changes in value of the Fund and could cause investors in the Fund to lose more money in adverse environments.    NLD Review Code: 3865-NLD-11/11/2019)

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Dexter Lyons