The Issachar Fund (LIONX, BRI, ESG), is 100% in CASH as of Sunday, July 12, 2020. (Click here to Listen to this blog/podcast). (Click here for the LIONX 2nd Quarter Fact Sheet) I locked in some gains last week as many LIONX stocks reached my price targets. Many of the leaders appear to be running out of steam and may need to form new bases while digesting recent gains. I do not want to be greedy, so I felt harvesting gains was a good way for me to refocus on the current trends and themes. All rallies come to an end sooner or later, and I believe it is better to sell when I can instead of when I have to. It is better to take some chips off the table when I have them instead of giving them back in a sell-off. I am not predicting a bear market or steep decline; I am just trying to manage risk as I perceive it.
Second-quarter earnings season is here, and I expect to see more stock blow-ups due to COVID-19 than normal, so that could create some volatile markets. I try to never hold stocks through earnings, and I like to buy stocks that gap-up on above-average volume after an earnings announcement. A stock gapping higher than the previous close after an earnings release on high volume tells me that big money may want to own it at any price. I believe that price and volume are the "tell" as to where a stock may be headed, and price trumps volume. Money is always changing hands so as institutional money flows out of the high-flyers; they often flow into the laggards and that is what I am expecting to see this week. I am seeing some interesting chart patterns in the retail and insurance sectors and the 21-day moving average may be the new 50-day moving average. If I am wrong and the true market leaders continue their advance, then I will look for lower risk buy points, hoping to ride the wave a little longer into the election. I am not trying to be right, just trying to be a wise steward of what has been entrusted to me. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed reduced its balance sheet again last week by $88 billion! That makes four weeks in a row of steady weekly declines in the Federal Reserve Bank's balance sheet, totaling over $248 billion since June 15. I do not understand why the Fed feels the need to reduce its balance sheet during this uncertain time of economic COVID-19 lockdowns. I certainly hope it is not a political reason because I believe that would be a grave blow to capitalism in America.
Bottom line: Price is the final judge, and it is telling me that the leaders and indexes are stretched and may be due for some backing and filling. LIONX is in cash but my guns are locked and loaded looking for lower risk buy points. I am still optimistic that the Fed will do the right thing and not undermine Trump's chances for reelection. However, the trend of the Fed's declining balance sheet in the last four weeks says otherwise. On the other hand, QE (quantitative easing) is still in the system, and liquidity is strong. Fear not, because God is still in control. I pray for God's grace and peace to be with everyone reading or hearing this message.
"Therefore, do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own" (Matt. 6:3;4, NIV).
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., (HCM) is not affiliated with Northern Lights Distributors, LLC. Important Risk Information: Mutual Funds involve risks including the possible loss of principal. An investment in the Fund may not be appropriate for all investors. The Fund may hold cash positions when the Adviser feels that 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. Past performance is no guarantee of future results. For more information on LIONX, please visit LIONX.net. NLD Review Code 3756-NLD-7/13/2020
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