Market Update: 08-27-18

The Issachar Fund (LIONX) is 75% Long in Equities and 25% in Cash as of Friday, August 24, 2018. LIONX holds ETFs in Health Care (45%) and Various (23) Stocks (30%). I covered the Short (hedge) position and purchased several more individual stocks as my bullish conviction level continues to increase. If things do not go as planned, I will not hesitate to hedge or sell positions to levels of risk I am comfortable with. Stocks were purchased based on the CANSLIM system created by Investor’s Business Daily (IBD) founder Willian J. O’Neil. CANSLIM is a powerful system for buying and selling stocks but it requires hard work discipline to be successful. I have been following O’Neil for decades and I believe that he is one of the best stock pickers in the business. There are no systems, models or strategies that work all the time, so one must stay alert for when it is time to make a change. I designed LIONX with the flexibility to adapt to what whatever methodology seems to be working in the current market environment. There are times when LIONX is fully invested and leveraged in Junk Bonds and there are times when we are 100% in Cash. Regardless of where we are, I remain focused on the daily LIONX percent gain/loss in its Net Asset Value (NAV). If the daily NAV gain/loss in LIONX does not line up with the risk (loss) I am assuming, then I take […]

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Market Update: 08-20-18

The Issachar Fund (LIONX) is 52% Long and 18% Short as of Friday, August 17, 2018. LIONX holds ETFs in Health Care (45%), Various Stocks (7%) and an ETF Technology Short (18%). I increased exposure on the long side and hedged it with a Technology Short as this rally gets extended. Technology has churned and stalled on light volume while late-cycle sectors like Health Care, Utilities, Real Estate and Consumer Staples have picked up steam. If things go as planned, the Hedge will be temporary. If not, I expect the Hedge to dampen downside volatility. LIONX holds a total of 7% in five stocks that have great fundamentals with attractive chart patterns. I would like to increase the number of individual stocks we are holding if the market continues to advance. The S&P 500 Index is slightly above an all-time-high, but volumes are light and Price to Earnings Ratios (P/E) are stretched so am cautiously optimistic. The FAANG Stocks (Facebook, Apple, Amazon, Netflix and Google) led the market higher until they peaked as a group in the middle of June. Facebook and Netflix were darlings among many investors, but they are now down about 20% each from their highs and they are still trending lower. I like to buy up-trending charts with good fundamentals and get rid of them as sell signals are triggered. I have never believed in the Buy and Hold philosophy because I have seen Bear Markets produce Life-Changing Losses that forced […]

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Market Update: 08-13-18

The Issachar Fund (LIONX) is 50% invested as of Friday, August 10, 2018. LIONX holds ETFs in Health Care (30%) and Consumer Staples (20%). I added to the Health Care and Consumer Staples positions and sold the Value ETF. The Health Care sector continues to advance as Baby Boomers will likely need more medical attention as they age. Health stocks seem to be less affected by Trade War Fears and a rising dollar than other areas of the market. However, if the market can not break out above the January high on above average volume then I would not be surprised to see the Health stocks get hit with some profit-taking/short selling. If this happens, I will do my best to manage the risk seeking an attempt to minimize losses. The dollar rallied over 1.3% on Thursday and Friday as Trump imposed additional sanctions on Turkey for not releasing an Evangelical Pastor held in prison. The Turkish Lira and the Euro dropped precipitously on fears of an economic crises/European bank failures. This sent shock waves through the US Stock Market. US Treasuries have rallied nicely in a possible flight to safety trade. Gold continues to decline as the dollar rises. If Gold were rallying with Treasuries then I might be more concerned but for now I am just being patient. I believe these fears will be allayed shortly and the market will eventually break out of this trading range we have been stuck in since […]

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Market Update: 08-06-18

Line Crossed and New Line Drawn! The Issachar Fund (LIONX) is 20% invested as of Friday, August 03, 2018. LIONX holds ETFs in these themes: 13% in Health Care, 4% Consumer Staples and 3% S&P 500 Value. During the last week, my “line was crossed” as positions came down to levels I was not willing to accept any further. Consequently, I sold all positions but purchased new ones that appear to be under accumulation. It appears that there is a rotation out of Growth into Value and historically that usually occurs at the end of a Bull Market. Not necessarily a good sign. However, the market does not always give clear signals, nor does it ring a bell when the party is over. One must be vigilant and disciplined to stay abreast of the warning signs while ultimately seeking to avoid life-changing losses. I would rather miss an opportunity than lose money. If getting out too soon causes LIONX to under perform the market, then that may be the price we pay to stay in the game for the long run. I do not try to swing for the fences but seek to get on base and score when the opportunity presents itself. Managing money is a full-time job and it is one of my passions. One area that does not seem to be affected by the Trade War Talks is Health Care. As Baby Boomers age, they tend to have more health-related issues requiring more […]

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Market Update: 07-30-18

A Line has been drawn! The Issachar Fund (LIONX) is 48% invested as of Friday, July 27, 2018. LIONX holds ETFs in these themes: 20% in Health Care, 18% in Small-Cap Growth, 5% in Online Retail and 5% in Large-Cap Growth. However, the line has been drawn and LIONX could be taking action very soon. Facebook and Netflix experienced steep declines after reporting 2nd quarter earnings last week. This negative reaction to the high-fliers is a cause for concern and should not be taken lightly. LIONX did not own these stocks but we felt the collateral damage in our ETFs. Small-Caps and Health Care have lead the market this year, but we may be seeing some signs of a topping in these areas. Small-Caps were seen as a huge beneficiary to the Trump Tax Cuts, Deregulation and a strong dollar but that trade may be over. Maybe they are just taking a breather as all things with life must breathe. Maybe it is a sign of a market top? No one knows but following a sell discipline is one way to take the emotions out of investing. I believe every buy should accompany a sell point or a “line in the sand” if you will. Fear and greed can be two powerful emotions that many investors struggle with, so I encourage you to seek Wisdom. As seen below in the Performance Report, LIONX is up 2.81% YTD while the S&P 500 Index is up 6.55% […]

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Market Update: 07-23-18

Please click here to see the LIONX 2nd Qtr Fact Sheet The Issachar Fund (LIONX) is 48% invested as of Friday, July 20, 2018. LIONX holds ETFs in these themes: 20% in Health Care, 18% in Small-Cap Growth, 5% in Online Retail and 5% in Large-Cap Growth. Health Care stocks continue to trend higher with relatively modest declines. The Small-Cap Health Care sector appears to be under accumulation and is the most attractive on a risk-adjusted basis. The Trump Tax Cuts, Deregulation and a strong dollar tend to benefit the Small-Cap stocks more than Large-Caps. However, Trump expressed his dissatisfaction with the Fed raising rates and the dollar dropped hard on Friday which sent the Russell 2000 Index (small-caps) down as well. I suspect Trump’s comments will have a short-term impact on the markets but it will not change the direction and momentum of the trend. The Fed is trying to raise rates (as commodity prices continue to plummet) because they have artificially kept rates too low for too long. The Fed wants to be able to lower rates to spur us out of the next recession that they will likely create. I know it sounds crazy, but the Fed has the power to expand and contract our economy at will and they can create money out of thin air. Sooner or later, there will be a price to pay and it will likely cause a lot of pain for a lot of people who […]

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Market Update: 07/16/18

Please click here to see the LIONX 2nd Qtr Fact Sheet The Issachar Fund (LIONX) is 43% invested as of Thursday, July 12, 2018. LIONX holds ETFs in these themes: 20% in Health Care, 18% in Small Cap Growth and 5% in Online Retail ETFs. These three areas have seen price increases along with volume gains in recent weeks. Once I have conviction that the market is poised to head higher such as now, I scan hundreds of ETF and Stock charts looking for rising price trends confirmed by rising volume. Big above average volume price increases indicate to me that big (smart) money may be flowing into an area that I should pay attention to. I also try to stay away from big above average volume price declines (i.e. Gold and Silver) as that may indicate institutional distribution. I do not try to predict how the fundamentals will impact prices six months from now like some of the big institutions. I try to ride the up-waves that big money creates when they decide to move in or out of a particular area. The smaller a mutual fund, the nimbler it tends to be when moving in and out of positions verses a larger fund. Large ships take more time to turn than a small boat. LIONX could be considered a small boat today but one day it may become a freighter. The Cumulative Advance-Decline line of advancing stocks minus declining stocks continues to trend […]

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Market Update: 07-06-18

The Issachar Fund (LIONX) is 100% in CASH as of Thursday, July 05, 2018. I expect volume to pick up next week as traders return from 4th of July vacations and 2nd quarter earnings reports start to trickle in. Trade War fears are still a threat to the market, so caution is still warranted. LIONX does not have a fully-invested mandate like most mutual funds so I will sit patiently until the next opportunity presents itself. I am expecting small-cap companies earnings to come in better than expected. This should result in higher stock prices. However, I plan to let the price and volume charts give me clues as to where I should invest and not act on what I think the market should do. Small-caps are outperforming the large-cap stocks. Small-caps tend to benefit more from the Trump Tax Cuts and they tend to be less affected by trade and tariff issues. I do not believe that there will be an official protracted “trade war” because Trump wants to win big in November and a significant “trade war” would hurt the Republican Party. Remember, Trump wrote “The Art of the Deal” so all this “tariff talk” will likely be resolved before the November elections. Trump is also trying to “Tweet down” the price of oil because he believes that higher gas prices in November will likely not help the Republicans. Bottom Line: Caution flags are flying but I may dip my toe back in […]

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Market Update: 06-28-18

The Issachar Fund (LIONX) is 100% in CASH as of Thursday, June 28, 2018.  All LIONX positions hit sell signals this week.  I followed my sell disciplines and parked the proceeds in a money market until the next opportunity.  Trade War fears, reduced liquidity and slower global growth seem to be the culprits behind this week’s market correction.  Whatever the reason, market risk is elevated, and caution is advised so keep an eye on the exit if you have not already reduced or sold your positions.  I would not ever advise sticking your head in the sand and ignoring risk.  Risk can be managed but managing return is very challenging to say the least.  Setting sell stops and sticking to them could prove to be very productive in the long-run. I am at a point in my life where life-changing losses is simply not an option.  As a result, I work very hard at managing the risk by hedging/selling positions in an effort to minimize the loss and letting my profits run in an effort maximize the gain.  I have found that there are times when it is fairly easy to make money in the market and there are times when it is difficult.  Currently, I am finding that it is difficult to make and keep money in the stock market.  I am optimistic that the Trump Tax Cuts and Deregulation will trickle down in to a better than expected earnings season in July and […]

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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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