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.  I believe the Fed has re-filled the “party punch bowl” sending a signal to the market that QE is not dead and it is very much still alive.  Not only did the US market suffer steep losses in December (about 15% peak to trough) but global stock markets felt the pain as well.  Stock markets around the globe appear to be addicted to central bank QE and I suspect that it will not be fun to watch when the market is eventually “detoxed”.  We got a sneak preview in December of what the market is capable of when it expects the Fed to tighten liquidity.  The stock market just experienced its worst December in 87 years linked to a “hawkish” (higher rates) Fed tone.  However, we just had our best January in 30 years linked to a “dovish” Fed.  Let’s pray the Fed keeps “cooing” like a dove.

The S&P 500 and the NASDAQ are trading below their 200-day moving averages (dma).  However, the Dow has broken above its 200-dma and I believe that may bode well for the S&P and NASDAQ doing the same.  The S&P broke its 200-dma and its 50-day moving averages on December 4th  so it will be a positive confirmation if the S&P can break above its 200-dma.  I believe it can.

Bottom line: I am very impressed with the way the market responded to the Fed’s dovish  comments and I believe we may be on pace to take out the October 3rd market highs. Put your money with my money and I promise to manage them exactly the same!   

Investors should carefully consider the investment objectives, risks, charges and expenses of the Issachar Fund. This and other important information about the Fund are contained in the prospectus, which can be obtained by calling 1-866-787-8355 or visiting https://www.LIONX.net.  The prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC.

Horizon Capital Management Inc, Inc is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

Mutual Funds involve risks including the possible loss of principal.

The Fund may hold cash positions when the market is not producing returns greater than the short-term cash investments in which the Fund may invest. There is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly and the Fund will not be able to sell stocks quickly enough to avoid losses or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions.  The Adviser’s judgment about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results.

S&P 500 Index is an unmanaged composite of 500 large capitalization companies. This index is widely used by professional investors as a performance benchmark for large- cap stocks.

NASDAQ Index is an electronic traded listing of over 5,000 active large and small companies.

Dow Index is the value of 30 large, publicly owned companies based in the United States, and how they have traded in the stock market during various periods of time.

Quantitative Tightening (QT) is a contractionary monetary policy applied by a central bank to decrease amount of liquidity within the economy.

Quantitative Easing (QE) is an expansionary policy aimed at increasing the money supply in order to stimulate the economy.

Investments cannot be made in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Past performance is no guarantee of future results.

NLD Review Code: 3122-NLD-2/4/2019