Market Update: 06-22-18

The Issachar Fund (LIONX) is 75% invested as of Thursday, June 21, 2018.  ETF themes LIONX owns are: Small-Cap (55%), Health Care (17%) and Global FinTech (3%).  Since LIONX does not have to be fully invested and it can go to cash in Bear Market declines, I have been re-positioning in and out of areas in an effort to take advantage of opportunities as I seem them.  I recently hedged LIONX long positions with Technology shorts then closed most of the longs and shorts as the volatility increased.  It appears that Small-Caps have been under accumulation and Large-Caps have been in a distribution/sell mode.  I am now concerned that the Small-Caps may join the selling party.  If that happens, I will not hesitate to do what is necessary at attempting to shield shareholder assets.  Since I am All-In, Risk Management is my top priority.   Trump’s policies will likely benefit small businesses more so than big businesses. This is quite a shift from recent administrations who may have been indebted to the big money of big business for helping them get elected in return for Presidential favors. Trade war or not, Trump is committed to reducing our trade deficit.  Small businesses that do not rely heavily on exports should do better than businesses that have a greater export dependency. The recent up-trend of the dollar will likely hurt the earnings of companies who do a lot of exporting verses smaller companies that mostly trade within America.  […]

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Market Update: 06-15-18

The Issachar Fund (LIONX) is 95% invested as of Thursday, June 14, 2018.  ETF themes LIONX owns are: Small-Cap (45%), Mid-Cap (15%), Technology (15%), Health Care (10%) and the US Dollar (10%).  I increased the LIONX Small-Cap weighting after receiving more conviction from a stronger dollar and advancing prices in that space.  The S&P 500 Index appears to be in a short-term uptrend bumping against some over-head resistance that may be penetrated because the Russell 2000 (small-caps) Index broke through its trading-range resistance last month.  I believe it is good sign to see the Small-Caps and Technology leading the market but now might be the time for the Big-Caps to play catch up.  I feel the market is fundamentally and technically strong and I am playing it one day at a time.         The Fed Raises Rates: The Fed decided to raise the Fed Funds Rate as planned by 1/4% (1.75% to 2% target range) and the expectations are to do the same at their next two meetings before year-end and three more hikes in 2019.  They expect core inflation to reach 2% by year-end and they now see economic growth hitting 2.8% for the full year.  They expect to see unemployment at 3.6% (currently 3.8%) by year-end.  With all the rate hikes already executed and planned in the future, the market has still been plodding higher.  Sooner or later, higher rates may be a concern but for now the market is trending higher.     ECB […]

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Market Update: 06-08-18

The Issachar Fund (LIONX) is 90% invested as of Thursday, June 07, 2018. Here are the ETF themes that LIONX owns: Small-Cap (35%), Mid-Cap (20%), Technology (15%), Health Care (10%) and the US Dollar (10%). Here is My Thesis for being long. I believe that the TrumpOnomics (Lower Taxes and Less Regulation) will be good for America and certain sectors/themes will do better than others. I believe that a low interest rate environment is behind us and the Fed will raise rates 25 bps at their next three Fed meetings to calm inflation fears. The Russel 2000 Index (Small Cap) has broken out of its trading range peak (January 23, 2018) and it continues to trend higher. However, the S&P 500 is still trading within its 10.10% peak to trough decline from 1/26/18 to 02/08/18. I believe that the S&P 500 Index will eventually break out of its trading range and head higher like the Russell. However, I expect the Russell to maintain leadership because I expect the dollar to continue trending higher. A strong dollar historically hurts the earnings of larger multi-national stocks and has little affect on Small-Cap stocks. Large-Cap stocks typically lose money when they repatriate their weaker currency foreign profits into stronger currency dollars and therefor they tend to be less attractive to investors on a risk-adjusted basis. Since the recent bottom in the middle of April, the US Dollar has been trending nicely higher with a few minor pull-backs. Currency […]

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Market Update: 05-30-18

The Issachar Fund (LIONX) is 50% invested as of Thursday, May 24, 2018. Here are the ETF themes that LIONX owns: Russell 2000 Value (11%), S&P Small-Cap (9%), Commodity Tracking (9%), Energy (6%), US Medical Devices (5%), US Dollar (5%) and Mid-Cap (5%). I was somewhat encouraged last week as the LIONX positions increased in value but then the market took a breather in anticipation of Trump cancelling the North Korea Summit. The market was gearing up for a favorable outcome at the Summit and now “uncertainty” is creeping its ugly head again. I believe Trump will eventually win the negotiations with North Korea and the market will rally to new highs but not without more price volatility I do not like the way Energy and Commodities are acting as they chip-away at recent gains. It seems that the algo-traders are punishing the recent winners and that is not a good feeling, if you know what I mean. Commodity ETFs were doing well but now they too are sliding south with Oil/Energy. There are times to draw a line in the sand and certainly act accordingly when the line is crossed. If risk is not managed properly, it could lead to life-changing decisions which is typically not a pleasant conversation. My advice is to make sell decisions (draw a line in the sand) before you buy so that you are not emotionally attached to a bad trade that could ruin your portfolio. There is currently […]

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Market Update: 04-24-18

  The Issachar Fund (LIONX) is 8% invested as of Friday, April 20, 2018. I purchased 10 ETFs this week that looked promising based on some volume and chart patterns I was seeing. In hind-sight, they did not perform well and produced losses I was not comfortable with given the current market environment, so I sold them. LIONX is currently holding two ETF positions in the Energy (5%) and Cyber Security (3%) space. It initially appeared that the market wanted to head higher on good earnings announcements. However, the tide turned when unfavorable news from Apple rippled through the Tech sector and that put a drag on the over-all market. 10-Year Treasury Yields rose to a 4 year high as inflation expectations rose to the highest level in about 3 years. The Fed continues to reduce its $4.5 trillion balance sheet by selling bonds it accumulated during the financial collapse of 2008.  It will likely drain liquidity in the market and that will likely cause further price declines since there is less money in circulation to bid up stock and bond prices. My focus remains on risk-management simply because Bear Markets are un-bearable. Bottom line, it seemed like investors had an early appetite for “risk” as Junk Bonds traded above its 50-day moving average but now they appear to be in hiding so buyer beware.  (Portfolio holdings are subject to change at any time and should not be considered investment advice. There is no guarantee that any […]

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Market Update: 03-15-18

       The Issachar Fund (LIONX) is 35% invested as of 3/15/18.  LIONX holds 5% positions in each of these 7 ETF sectors: Innovation, Information Technology, Dow Jones Internet, North American Tech-Software, S&P Mid-Cap, Extended Market and Cloud Computing.  These positions have not been profitable for LIONX, so I stand ready to cut losses as needed.  While the S&P 500 Index has retraced most of its recent loss, I do not believe we are out of the woods yet.  The Merrill Lynch High Yield Index is trading below its 50-day moving average and that tells me that investors do not have an appetite for risk taking so caution may be at hand.  The market has been stuck in a trading range and it may be trying to re-establish a new up-trend, but we may need a little more time before the old highs are taken out.  I believe that 1st quarter earnings will be better than expected and the market will break out of this trading range.  However, I will act on what the market does instead of what I think it should do.  The low volatility price trend we experienced in 2017 may be over and we may have to accept higher volatility going forward.  I am not convinced that will be the case, but I am prepared to handle higher volatility.  However, I will not abandon my risk-management principles that have helped to keep me out of major declines since 1990.  Remember, it was […]

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