Market Update: 12-27-21

Santa Rally? 

The Issachar Fund is slightly invested! Risk has declined as the S&P 500 index makes a new high, so I purchased a few stocks. Volume was light, but stocks were setting up in the chips and chemicals, so I am listening to the charts. Junk bonds are also trading at all-time highs, which means that investors still have a risk appetite. Yields are on the rise but not alarming while the dollar moves sideways, so that gives me a sense of reduced risk to dip my toe in the water. If these positions do what I expect, I will buy more, but I could quickly go back on defense if my expectations are not met. This week and two days into the new year are known as the Santa Rally, a good time to be invested. Since November, it feels like the market wants to break out of this trading range, so now would be a good time to test what I see in the charts. The indexes are looking constructive because of a few big names, but there are still a ton of broken stock charts beneath the surface. The Fed is on our side, and that gives me the conviction to take a baby step with plans to get more invested if it works out as planned. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)    

The Fed increased its balance sheet by $34 billion last week to another all-time high! The Fed’s total assets now equal 38% of the US’s GDP versus the European Central Bank’s 82% and the Bank of England’s 133%, so we are not as bad as our neighbors. I expected the Fed’s balance sheet to decline, but they are still creating new money out of “thin air” buying bonds to keep our rates near zero. If the Fed keeps the liquidity flowing, this new money will flow into the stock market and help many boats stay afloat. However, stopping the printing presses or raising rates as they promised, the hangovers will not be fun for those who chose to ignore the warnings and keep drinking. That is why I dance with one eye on the exit. I have seen many bear markets and recessions in my last 31 years of managing money, and I believe the next one could be the worst of all. Buy and hold will work until it doesn’t. Managing risk will always work.     

Bottom Line: Issachar is lightly invested with plans to buy more if my expectations are met. I like the chips, real estate, agriculture, building, and telecom market areas as they appear to be under accumulation. Junk bonds say that risk has declined, so it is time to add exposure. The charts will tell me what to do next if we are rewarded. Thanks for trusting me with your hard-earned money, and I promise always to do my best. I hope you had a Very Merry Christmas, and now I want to wish you a Prosperous and Healthy New Year!      

Trust in the Lord with all your heart and lean not on your own understanding;in all your ways submit to him and he will make your paths straight. Proverbs 3:5-6

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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, obtained by calling 1-866-787-8355 or visiting www.IssacharFund.com. 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. (HCM) is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information: Mutual Funds involve risks, including the possible loss of principal. An investment in the Fund may not be appropriate for all investors. 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. The Adviser’s judgment about the attractiveness, value, and potential appreciation of particular asset classes and securities in which the Fund invests may prove incorrect and may not produce the desired results. Past performance is no guarantee of future results. Ratings are only one form of Fund performance and should not be used as the sole consideration in making an investment decision. Opinions expressed are subject to change and are not guaranteed and should not be considered investment advice. For more information regarding the fund, including current performance, please visit www.IssacharFund.com.   Review Code: 5742-NLD-12/27/2021.

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Dexter Lyons