Market Update: 11-19-18

I was expecting the market to head higher into the new year but now I am not so sure that we will get the widely expected Santa Clause Rally. The S&P 500, NASDAQ and Russell 2000 Indexes are all BELOW their respective 200-day moving averages (dma) except for the Dow. The Dow holds more defensive names and I am seeing big money flows out of the Techs into the presumed big names like Coke, Procter & Gamble and Mc Donald’s which populate the Dow. The Dow is showing a pennant formation that could test the highs going into Thanksgiving. However, most of the former leading stocks remain in busted patterns that may need time to heal. Many mutual funds must stay fully invested and their charts are telling me that they are trying to hide in some of the big Consumer Staple names. I don’t believe this is a healthy sign for the bulls and it might be a good time to jump in the Bear camp (short) until the Indexes can rally firmly above their 200 dma. I do not have any shorts or longs currently, but I am looking for set-ups on either side. The Junk Bond market continued its steep down-trend! I believe Junk Bonds are a good indicator of investor’s appetite for risk and the market currently seems to have a weak stomach for risk. Junk Bond prices are declining on above average volume (foot-prints) and that tells me that big […]

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Market Update: 11-12-18

The Issachar Fund (LIONX) is 25% invested as of Friday, November 9, 2018 with 75% in Cash.  Investor’s Business Daily (IBD) called the rally on Wednesday a Follow Through Day (FTD) which marks the beginning of a Confirmed Uptrend according to their CAN SLIM system.  According to an independent 12-year study by American Association of Individual Investors (AAII) from Jan. 1998 – Dec. 2009 of over 50 leading investment strategies, AAII found CAN SLIM to be the top performer.  I believe CAN SLIM is superior system because it is based on time-tested facts (not opinions) and common-sense logic that I understand and use today. On Thursday, I purchased 9 stocks (25%) exhibiting CAN SLIM fundamental and technical characteristics.  However, I do not like how the NASDAQ did not hold its 200-day moving average support and lost 1.65% on Friday.  This type of decline undermines the strength of the rally, so I stand ready to cut our losses and patiently wait for another lower risk opportunity.  I prefer to see a more rounded-bottom formation instead of the V-shaped bottom.  V-shaped bottoms tend to exhibit a higher probability of failure than slow-rounded bottoms.  I believe it would be healthy for the indexes to digest recent gains with some sideways action before launching to new highs.  Further high-volume selling would raise serious concerns that the bottom may not be in.  Bottoms are formed when demand outstrips supply, so I take my cues from the market in an effort […]

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Market Update: 11-05-18

Patience is a virtue! The Issachar Fund (LIONX) is 100% in CASH as of Friday, November 2, 2018. I believe the market will head higher into the new year and I am diligently looking for an early entry point. I have a Watch list of stocks to buy and some are setting up nicely while others still need time to form proper bases. The Healthcare, Retail Apparel and Retail Auto Parts industries look attractive at this time but a few more days are needed for confirmation. I am patiently waiting for what Investor Business Daily (IBD) calls a “Follow Through Day” (FTD) which is when a major Index closes up at least 1.25% on higher volume than the previous day. According to IBD, a FTD tends to simply confirm a new uptrend. IBD says that no bull market has ever started without an FTD but not every FTD leads to a bull market. No system is perfect but I believe IBD has one of the best time-tested systems I have seen in my 28-years of managing money. All “systems” should be monitored with good “common sense” to know when the “system” might be broken and should be abandoned. There are no guarantees in life and no one has a crystal ball which is why I remain flexible and do not subscribe to any type of buy and hold philosophy. People and systems may eventually fail you so trust your God-given Wisdom and know He is […]

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Market Update: 10-29-18

CASH is a Position! The Issachar Fund (LIONX) is 100% in CASH as of Friday, October 26, 2018. I sold the two Floating Rate Funds because I saw above average selling volume in a few Floating Rate ETFs and I did not want to risk losing money in our Floating Rate Fund positions. I am patiently building my Watch List of stocks that have performed relatively well during the recent sell off. The S&P 500 is down over 9% since 10/3/18 while LIONX is down less than 0.3% in the same period. LIONX is up 3.11% while the S&P 500 is only up 0.98% YTD. It is not about how much you make, it is more about how much you keep that counts. I believe managing risk is the key to long-term success! The S&P 500 is sitting on support and I am expecting a bounce. If the bounce fails and breaks this level of support, we could see the market test the May 3rd bottom which is about 2% lower. Fundamentally the market appears strong but technically it looks weak and corporate guidance has been tepid at best. I believe the market is trying to digest tariffs, elections, higher rates and a liquidity and credit contraction due to the Fed decreasing its balance sheet by selling bonds. In an effort to revive the economy after a near financial collapse in 2008, the Fed began aggressively buying bonds driving interest rates to near zero. In […]

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Market Update: 10-22-18

LIONX MARKET UPDATE – Monday, October 22, 2018 I believe market models and strategies work for a “season” until they don’t, and no one tells you they quit working. I try to remain open-minded and flexible (without too much bias) and use my 28-years of experience and Wisdom (from God) to help me find what seems to be working at-the-time. I try to follow the “leaders” in and out of the market in an effort to capture a majority of the uptrend and avoid most of the decline. The stock market “leaders” are stocks that lead us in the direction the indexes are going. I believe big institutions hire the best analysts to do fundamental research in order to give stock recommendations to portfolio managers who manage the money entrusted to them. The big institutions buy the stocks that make the trends that I try to follow. The most recent bull market leaders were the FAANG stocks (Facebook, Apple, Amazon, Netflix & Google) and now they are all well off their highs and trending below their 50 day lines. This is not a good sign and indicates “high-risk” to me, so I take it seriously. LIONX exited all stock positions on 10-4-18 well ahead of the 4.5% decline in the S&P 500 Index. All my investable assets are in LIONX, so I have an incentive to focus on growth when the “season” changes. I believe there is a time to be long and a time […]

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Market Update: 10-15-18

Time for Caution! The Issachar Fund (LIONX) holds 73% in two Floating Rate Funds and 27% in CASH as of Friday, October 12, 2018. I added another Floating Rate Fund to LIONX because they have both been growing at high single-digit rates of return and experienced little draw-dawn while the stock market slides into correction territory. I say, “Don’t Feed the Bears by buying these dips and instead let the institutions form the bottoms and build the bases. When the market does bottom, and stocks begin to break out of sound bases, I expect to have the option to use Stock SWAPS (leverage) or sell the Floating Rates to buy stocks. LIONX can get 100% exposure with only 20% of cash using SWAPS if needed. If the bottoming process and uptrend takes longer than anticipated, I may sit patiently in Floating Rates until the next opportunity. Stocks took a beating last week! US 30-Year Yields tried to recover from the 3.4% Yield spike on October 8th but that did not stop the S&P 500 from falling 5.28% last Wednesday and Thursday. The S&P 500 is now up 5.06% YTD with a 10.10% Maximum Draw-Down (MDD) while LIONX is up 3.11% with an MDD of 4.43%. LIONX has an Ulcer Index (UI) of 2.25 which is less than the 3.23 UI for the S&P 500 Index (less is better) since inception (2/28/14) and that is the key point. LIONX may not beat the S&P 500 in […]

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Market Update: 10-08-18

Click here to check out my 3rd Qtr. LIONX Fund Fact Sheet. The Issachar Fund (LIONX) holds 35% in a Floating Rate Fund and 65% in CASH as of Friday, October 5, 2018. I sold all CAN SLIM stocks as they crossed my “line in the sand” sell stops. Floating Rate funds are holding up very well in this rising rate environment as I expected. However, there are very few CAN SLIM stocks that I would consider attractive, so I am patiently watching from the sidelines. When the market is not rewarding me for taking risks, I reduce exposure or go to the safety of CASH. The U.S. unemployment rate sank to a 49-year low of 3.7% and the economy added 123,000 new jobs in September setting the stage for a strong holiday season. What is good for “Main Street” is not necessarily good for “Wall Street” as yields spiked across all maturities. 10 Year Treasury Yields rose to a 7-Year high of 3.2% on Thursday and stocks declined rapidly. When yields rise, less money is likely to enter the stock market as investors seek the higher yields offered in the bond market. It is a delicate balancing act and it may not be over as money gets re-shuffled from one asset class to another. The Bid-to-Cover ratio (measurement of demand) in the latest Treasury auction stood at 2.4 verses 2.8 (higher is better) a month ago. This may indicate that the tariff spat we […]

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Market Update: 10-01-18

LIONX 3rd Quarter Fact Sheet The Issachar Fund (LIONX) finished the 3rd quarter up 0.39% and I am very optimistic for the upcoming seasonally and historically strong 4th quarter! LIONX holds 28% Stocks, 35% Floating Rates and 35% Cash as of Friday, September 28, 2018. LIONX has 19 leading stocks exhibiting CAN SLIM fundamental and technical characteristics in various industries. Leading stocks continue to break out of sound basing patterns with strong fundamentals (earnings and sales). I purchased a Floating Rate mutual fund in a nice uptrend. I expect the Floating Rates to perform well in the current rising rate environment with low inflation. I continue favor Health Care, Energy and Technology Sector stocks as they appear to be under heavy accumulation. Financials did not perform as expected after the Fed’s ¼ point rate increase last week so I sold them and purchased stocks in the Energy sector. Energy appears to be getting hot while Financials are not. The S&P 500 continued to trend higher as money poured into the index ETFs ignoring Price/Earnings (P/E) valuations. I have noticed many stocks trading above their P/E ranges over the last year and that is a little concerning. However, the market could be anticipating better than expected 3rd quarter earnings due to be released over the next few weeks. Some blow-out earnings surprises could justify the elevated P/E ratios I am seeing and only time will tell. I am working hard to stay invested in the up-trends […]

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Market Update: 09-24-18

The Issachar Fund (LIONX) is 12% Long Equities and 88% Cash as of Friday, September 21, 2018. LIONX holds 9 Stocks exhibiting CAN SLIM characteristics in various industries. Interest rates have been rising rapidly in anticipation of the Fed raising short-term rates another quarter-point at their next meeting on Wednesday. Higher rates are causing the recent stock leaders to lag a bit while money rotates out of one sector and into another. I believe sector rotation is healthy for a bull market to sustain its momentum. I have been actively buying and selling stocks attempting to maximize our gains and minimize our daily draw-downs. I would like to be more invested, but risk-management takes precedent over buying and holding an index fund through another 2008 (>50%) type decline. I am patiently seeking CAN SLIM type stocks under accumulation breaking out of sound basing patterns. I believe the Bull Market is still intact, but we may have to consolidate a bit here while stocks digest recent gains and stretched P/E ratios compress. I have noticed that a few stocks that have lagged the recent advance are now starting to show signs of institutional accumulation. When institutions move into a position, they typically leave a trail of higher prices accompanied with increased volumes. Big institutions (mutual funds, hedge funds and pension funds, etc.) can’t hide their actions from a chart which is why I look at a lot of charts to get a feel for where money […]

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Market Update: 09-17-18

The Issachar Fund (LIONX) is 37% Long Equities and 63% Cash as of Friday, September 14, 2018. LIONX holds 29 Stocks in leading industries with CAN SLIM fundamentals and chart patterns. I have been actively buying and selling stocks attempting to maximize our gains and minimize the daily draw-downs. I would like to be more invested and I am seeking stocks under accumulation breaking out of sound basing patterns. I believe the Bull Market is still intact and better times are ahead. The S&P 500 Index held its January high support and the NASDAQ Index held its July high support area and both indexes bounced higher last week. This indicates to me that big money is betting that the economy and the stock market is going in the right direction. I believe that most stocks follow the trend of the indexes, so the current rising tide of the indexes is lifting many boats (stocks). The reverse is often true when the tide goes out. Market timing can work but it requires a lot of time and discipline and I am committed to both. I believe that institutions create the major trends and my job is to stay in sync, seeking to profit from the up-trends and avoid the major downtrends. Investor’s Business Daily (IBD) has a time-tested system for identifying trends and they are saying that we are in a “Confirmed Uptrend”. The Bank of America Merrill Lynch High Yield Master II Index is trending […]

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