Market Update: 03-11-19

LIONX is about 95% invested.  We own about 75% in two short-term bond ETFs and about 20% in various stocks with about 5% in Cash.  I sold several stocks as they hit sell points and invested the proceeds to our short-term bond ETF position.  The bond ETFs we own have been trending up since the market topped in October.  The stocks we currently own are showing resilience and support while the indexes fall below their 200-day moving averages (dma).  The Bull Market turns 10!  It has been 10-years since the market bottomed on March 3, 2009 and the long-term trend is still up even with the steep 19% Q4 decline we just witnessed.  During the last ten years, the Fed kept rates artificially low (near 1%) on the monetary side and that helped to produce stock market gains.  Cheap money allowed companies to borrow at low rates and do stock buy-backs which decreased the float and boosted earning causing stock prices to rise even higher.  Trump reduced taxes and regulation on the physical side and that helped to boost stock prices even more.  I believe that there will be a price to pay for this global sea of easy money, but we do not appear to be there yet.  However, I am watching for signs of a top like we had in October 2018 and will do my best to get out of harms way.  I am a risk manager and I never buy and […]

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Market Update: 03-04-19

The Fund is about 90% invested in ETFs and Stocks.  There is about 60% in short-term bond ETFs and about 30% in individual stocks.  I like the Cloud, Healthcare, China and Technology space more than I like bonds at this time.  I am seeing a lot of institutional demand in the Software stocks as companies get out of Local Network Security and into Internet (Cloud) Security.  This is a huge Theme that appears to be spreading fast as companies try to “secure” their data.  Data Security and a transition to 5G Technology is occurring faster that we might imagine, and the companies involved in this “wave” of new innovation have my attention.  I am studying lots of charts and fundamental data seeking to add new positions mainly in the Cloud Security and Software areas. The good news is, there are a lot of fundamentally strong stocks in these areas breaking out of sound technical patterns.  The bad news is, the market is extended and due for a pull-back. The market trend is still up! I believe this V-shaped recovery is driven by a “dovish” Fed and FOMO (Fear of Missing Out).  The Fed uttered some “hawkish” (higher rates) comments in Q4 and the market proceeded to discount the worse and the market fell over 19% from high to low.  The Fed did an “about-face” and released a “dovish” (lower rates) tone and the market bottomed on 12/24/18 and has since rallied over 19%.  A lot […]

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Market Update: 02-25-19

The Issachar Fund (LIONX) is about 95% invested in stocks and Bond ETFs.  LIONX has about 60% in short-term bonds and about 35% in various growth stocks.  This is the most bullish I have been all year!  My conviction level has increased substantially as I see more stocks breaking out of sound base patterns on increased volume.  Volume is the heart-beat of a stock but price is everything.  With price and volume on the rise, this tells me that the “big-money” is in the accumulation phase instead of the distribution phase we witnessed in December.  If my current outlook and positions are rewarded, I may employ some leverage but only if conditions remain or improve.  I believe the market was expecting a recession after the Fed indicated in Q4 that they were on “autopilot” with its balance sheet reduction and raising rates.  I believe the market now does NOT expect the Fed to raise rates and the market is cheering a lower rate environment.  In fact, the CME Fed Futures is indicating that rates will remain the same until January 2020.  As a consequence of lower expected rates, some corporate earnings estimates are being revised substantially upward.  After the disappointing statements from the Fed in Q4, earnings estimates were rapidly being revised downward and the S&P 500 dropped over 19% until bottoming on Christmas Eve.  Since Christmas, the S&P 500 is up over 19% and less than 4% away from an all-time high! All four […]

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Market Update: 02-19-19

The LIONX Fund is about 60% invested!  I am holding positions in the Cloud, Health and Bond space as they appear to be under institutional accumulation.  I am seeing both strong fundamentals (sales and earnings) and technicals (chart patterns) and these “themes” appear to be in favor.  Cloud Computing is storing and accessing data and programs over the Internet instead of your local computer.  More and more businesses are moving to Cloud based services especially as Internet speeds increase (5G) and prices decline.  Historically, Cloud and Health stocks have been very little affected by the China Trade War and if it is resolved shortly, I would still expect “big money” may support these themes.  Bonds are generally doing well mainly because of an anticipated economic slow-down therefore I believe the market does not expect the Fed to raise rates any time soon.  I happen to think the next move by the Fed will be to lower rates.  I am seeking to buy leading stocks on weakness after exhibiting strength with the highest quality fundamentals, exhibiting the most strength in their industry groups. CANSLIM could be becoming “dated” due to “everyone” having easy access to data and charts.  CANSLIM is a “system” for selecting growth stocks , developed by William O’Neil that has worked very well for many years.  However, I believe that “Systems and Black-Boxes” work until the don’t and no one really rings a bell to say the party is over.  It can be […]

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Market Update: 02-11-19

The Issachar Fund (LIONX) is about 30% invested in stocks and ETFs.  I reduced exposure last week since LIONX positions were not performing as expected.  I believe “slugging” % is more important than “batting average” so I try to keep my losses small and let my winners run.  I tend to play a little “close to the vest”.  I am seeking stocks/ETFs exhibiting strong relative strength, great fundamentals (earnings and sales) and nice looking technicals (chart patterns).  I believe my “Buy List” is full of potential winners but I am patiently seeking to “buy right” because I feel that is my first line of defense and a major component of sound risk-management. The European Union (EU) slashed its GDP outlook for Germany from 1.8% to 1.1% and the Euro Zone from 1.9% to 1.3% for 2019.  This is a huge reduction in growth expectations and may confirm what the bond market has been trying to tell us.  Global growth is slowing and that could mean lower profits for stocks.  US and global bonds across the board have been rising as yields have been falling since October, right after the market peaked.  The spread between the 2-year and the 10-year Treasury yields have narrowed to about 16 basis points and could possibly flatten.  A flattening yield curve could be a signal of lower expected slower growth.  If the spread flattens or turns negative, I would not be surprised to see the stock market head lower to […]

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Market Update: 02-04-19

My Fund is about 50% invested!  I have been buying stocks and ETFs that appear to be under accumulation with a focus on the Cloud, Health and Bond sectors.  I believe that emerging market bonds could offer a great risk-adjusted return at this juncture.  I am seeking stocks with good fundamentals (sales and earnings) and healthy-looking price and volume chart patterns.  We are in earnings season and many stocks are breaking out to new highs with just a few blowing up after earnings and guidance releases.  I do not plan to hold any stock going into its earnings release and risk a potential “blow up” where a stock could fall in price due to a bad report.  However, stocks can “blow up” for no apparent reason.  The Semi-Conductor Sector produced nice gains last week on strong supportive volume.  I believe this is a good sign that institutions may be coming back into the market.  I plan to add more positions to the Fund as opportunity presents itself. The Fed released a dovish (low rates) policy statement on Wednesday and the market shot higher in price on above-average volume!  I now have conviction that the institutions “big money” are coming back in this market after being on “pause” since the Fed’s rate hike in December.  The Fed mentioned “patience” eight times in its policy statement signaling that it may have raised rates in December prematurely.  The market seems to like the new “tone” of the Fed.  […]

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Market Update: 01-28-19

The Issachar Fund (LIONX) is 100% in Cash BUT that could change this week.  Just like in real estate where it is all about “location”, the stock market it is all about “earnings”.  This week is like the Super-Bowl of earnings releases with names like Amazon, Apple, Caterpillar, Microsoft and Tesla to name a few.  As quarterly earnings are being reported, management also gives “guidance” on the company’s expected earnings and revenue.  This has the potential to be a “game changer” resulting in higher or lower stock prices so this week could give us clues as to where we are headed.  I believe we may be headed higher, but I rely on the charts to reveal the truth. The NASDAQ Index has retraced about half of what it lost as it bounces of support at its 50-Day moving average (dma) on good volume.  I believe that it is a good sign to see the NASDAQ and the S&P 500 find support at its 50-dma.  It shows me that institutions are willing to “support” or “buy” the index at these levels in an effort to build investor confidence.  If we have a bad week of earnings announcements and the market breaks the 50 dma on big volume, then we could be headed lower to test the Christmas Eve low which is about 13% lower.  I suspect the 50 dma will “hold the line” because the Fed is likely on our side ready to add liquidity as […]

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Market Update: 01-22-19

The Fund is 100% in CASH patiently “stalking” a few stocks to buy.  On October 3rd, 2018, (I went to CASH) the Fed indicated that they were “a long way” from getting rates to neutral (indicating more rate increases on the way) and the S&P 500 Index dropped over 19% until bottoming on December 24th.  Since Christmas Eve, the S&P 500 has formed a V-Bottom pattern and is up over 13% (only about 8% from the high) after the Fed indicated they may slow their rate increases.  Judging from this V-Bottom, I would not be surprised to find out later that the Fed has halted its Quantitative Tightening (QT) and re-implemented some form of Quantitative Easing (QE) to appease Trump and the markets.  V-bottoms were trademark (signature) patterns witnessed during the QE era, but we are now in QT mode, right?  I believe that the market was expecting the Fed to plunge us into a recession with its rapid rate increase posture and now the market expects the Fed to “stand down” to not hinder the market’s advance.  China just posted its slowest economic numbers since 1990, do you think the US will grow faster or slower now that China’s economy is struggling?  Maybe the Fed got the message and this time is different? Volume (the heartbeat of a stock) has not been “strong” coming off the bottom.  I believe the market is “concerned” with the negative impact to corporate earnings should  China and Trump not […]

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Market Update: 01-14-19

The Issachar Fund (LIONX) is 100% in Cash patiently waiting our next opportunity.  I bought a few stock positions in LIONX last week (dipped my toe in the water) that did not perform as expected so I quickly sold them.  I believe the market is “ripe” for a pull-back as price approaches a “ceiling” of resistance.  On 12/21/18, the S&P 500 Index dropped over 2% on above-average “heavy volume” then dropped another 2.7% on 12/24/18 (Christmas Eve) to form the most recent low.  The S&P 500 has since rallied over 10%  higher into “resistance” since the Christmas Eve low on declining volume.  Historically, this bounce from the low is normal in a “correction” or Bear Market.  Correction or Bear Market “labels” do not concern me.  However, prices rising on declining volume “concerns” me of a potential “red flag” that “big money” is not participating in this rally.  I focus on Price and Volume as a way of “telling” me where the market may be headed.  I would not be surprised if the market “pulled the rug” out from under us.  If the “rug” gets “pulled” I would expect the market to drag the majority of stocks down with it as we seek to find another “bottom”.  The market has been in a down-trend (series of declining price peaks) since 10/3/18 and we are approaching the down-trend line.  However, I believe the 2600 level on the S&P 500 is the more important level of “resistance” that […]

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Market Update: 01-07-19

The Issachar Fund (LIONX) finished 2018 up 2.41% with a Maximum Draw Down (MDD) of only 4.43% while the S&P 500 Index finished 2018 down 4.38% with an MDD of 19.36%! LIONX is 100% in CASH waiting for the next opportunity. Click here for my latest LIONX Fact Sheet Fed Chairman, Jay Powell, promises to be patient with raising rates, jobs data comes in far-better than expected, China agrees to mid-level trade talks this week and the market blasts over 3% higher on Friday! The market seems to think that if stocks starts to tank, the Fed may take a neutral stance and withdraw their Quantitative Tightening (QT) and possibly do some Quantitative Easing (QE). It seems crazy when the market rallies off Powell’s comments about keeping the market “liquefied” in an effort to keep this market bubble inflated. The market appears to love liquidity and it is sad to say but I believe we may be “hooked on QE”. What will the “withdrawal” process look like? What will it take to “break” us from this “liquidity addiction”? A sudden crash or possibly a slow grinding Bear Market might do the trick. Who knows but, we may have put in a tradeable bottom where stock prices trade higher, ……for a while. I believe that we are still in a down-trend and every pullback should be viewed as a counter trend rally. Historically, the odds for a continuation of the trend are higher than a trend […]

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