At Resistance, Now What?
The Issachar Fund is about 25% invested in ETFs that hold physical Gold (22%) and Silver (3%), with the remainder invested in a higher-yielding Government backed money market fund! I have very little conviction this market will break through resistance based on weak stock chart patterns and an inflation-fighting Fed. Jay Powell raised rates 25bps as expected last Wednesday and did not lead the market to believe he is done. Once the market anticipates the Fed may “pause” its rate-raising campaign or “pivot” to a lower rate environment, I might have more conviction. The NASDAQ 100 tech-heavy index is at resistance, led by a handful of mega-cap stocks that may fool investors into believing all is well. Below the surface of the index are a ton of broken-down stock charts. Most earnings have been coming in strong, but most of the forward guidance I see has been weak, which erodes my conviction. However, I do have confidence in Gold and Silver ETFs. Gold is at an all-time high line of resistance, but I believe it may continue higher because of a weakening dollar and uncontained inflation. There is a global de-dollarization trend to trade in other currencies. I do not see any pending Washington policy changes that might reverse this downtrend in the dollar that started in September. Gold and Silver charts have been advancing on above-average volume, maybe in anticipation of a debt ceiling collapse, which I believe is a cause for great concern. I suspect many investors are buying Gold and Silver as a safe-haven store of value, which concerns me even more. I do like/trust Bitcoin.
Nevertheless, my job is to assess the current risks and position Issachar for future potential gains. Yesterday’s return is history, so I focus on where the market may be heading and not where it has been. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed decreased its balance sheet by over $70 billion last week as it steadily unwinds its bloated balance sheet! Jay Powell said they are “data dependent” and have a long way to go before inflation returns to its 2% target, and it may be too soon for rate cuts. The jobs number came in hot on Friday, supporting the Fed will keep rates higher for longer, which has historically not been good for stocks or bonds. However, the upside jobs surprise of 253,000 vs. estimates of 180,000 was fueled by a 378,000 upward birth rate adjustment. That was the second-highest monthly adjustment in history, so take away the adjustment, and perhaps the jobs number was not so impressive.
Bottom Line: I like Gold and Silver and can’t find anything else to get excited about besides a 5% money market. I do not like how big money has been bailing out of former leading stocks with great fundamentals/technicals and piling into a seeming handful of big mega-cap names (a short-term parking place) before a possible lower leg. I view this as a higher-risk environment. Therefore, I am positioned accordingly, expecting to make money as investors de-risk and invest for tomorrow. Grace & Peace to everyone!
*God touched my heart in June 2019, and I switched Issachar to a 100% Biblically Responsible Investing (BRI) Fund, and performance improved. I will not invest in companies that go against the principles of God.
God has not destined us for wrath but to obtain salvation through our Lord Jesus Christ. 1 Thessalonians 5:9
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, obtained by calling 1-866-787-8355 or visiting IssacharFund.com. 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 incorrect and may not produce the desired results. Past performance is no guarantee of future results. Ratings are only one form of Fund performance and should not be used as the sole consideration in an investment decision. Opinions expressed are subject to change, not guaranteed, and should not be considered investment advice. There is no assurance these opinions or forecasts will come to pass, and past performance is no assurance of future results. For more information regarding the fund, including current performance, please visit IssacharFund.com. Review Code: 5437-NLD-05/08/2023.