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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Market Update: 09-10-18

The Issachar Fund (LIONX) is 35% Long Equities and 65% Cash as of Friday, September 7, 2018. LIONX holds 26 Stocks in leading industries with CAN SLIM fundamentals and chart patterns. I am patiently looking to buy more CAN SLIM stocks as opportunities present themselves. Technology stocks came under some recent heavy selling which pulled LIONX down a bit, so I sold a few winners and losers to balance the risk/reward potential. My bias is that technology will bounce off support and resume higher. Maybe we just needed to digest some recent parabolic gains that may have gone too far too fast. The S&P 500 Index recently broke above the January high resistance area at 2872 and now has filled the “gap up” as it slipped back to the high (on lower volume) which currently serves as the next logical support. This is very constructive, in my opinion. September is traditionally a weak month, but I believe the market will respond favorably if the China skirmish ends, or the market anticipates that the Republicans will dominate in the November elections. My gut says the market will hold support and work higher. If we do not find support near the 2872 area, then I suspect the S&P 500 Index will likely drift lower to test the next level of support at the 50-day moving average near 2827 (1.6% lower). Non-farm payrolls increased by 201,000 jobs in August and the unemployment rate remained at 3.9%. The average […]

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Market Update: 09-04-18

The Issachar Fund (LIONX) is 35% Long in Equities and 65% in Cash as of Friday, August 31, 2018. LIONX holds 1 US Quality ETF (1%) and Various (23) Stocks (34%). LIONX had some very nice gains that were getting extended, so I took some profits off the table. Stocks are still coming out of basing patterns on strong volume and that is very encouraging as I look for new opportunities. I hope to get fully invested real soon but I will let the charts speak for themselves. Leading stocks are still breaking out of sound basing patterns and that gives me conviction that this Bull still has some room to run. I believe the market follows the leaders and not the other way around. In my opinion, the institutions tend to hire the best analysts who do extensive research to find the best stocks to buy and sell. When they buy or sell, they usually do so with huge dollar volumes and that is what I like to follow. I try to follow the leaders because they give me clues as to where the money is flowing and going. Managing money is a little art and science but one must always remain open-minded and humble otherwise the market will check your pride. I believe the market is due for a minor pull-back to ease some of the anxiety of a market near all-time highs. Keep in mind that there may be a lot of […]

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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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