Update: 08-21-23

Oversold in a Downtrend!    The Issachar Fund is 100% (on defense) invested in a short-maturity fixed-income ETF! I switched from a high-yielding money market into a higher-yielding short-term bond ETF waiting for a Follow Through Day (FTD). Investor’s Business Daily (IBD) defines an FTD as a 1% index gain on greater volume, and their 100-year study revealed that no bull market has ever started without an FTD. IBD has labeled this market a “market in correction, ” suggesting no buying until we get an FTD. My core strategy is built around Bill O’Neil’s (founder of IBD) investing methodology, which helped him reach billionaire status. Bill’s methodology is the best publicly available investing system I have ever seen. My strategy centers around Bill’s and trying to buy stocks under institutional accumulation with accelerating earnings and sales exhibiting sound technical chart patterns. My watch list of stocks (135) is filled with potential companies to buy after we get an FTD. My current perception of risk is high; therefore, I will wait for an FTD and then look for stocks setting up with proper pivot points of entry. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)

The NASDAQ Composite (mostly tech stocks) and S&P 500 indexes (large caps) sliced through their 50-Day Moving Averages (DMA) last week, breaking support on above-average volume! This is a “red flag” that risk has increased, and bulls are pulling in their horns. The good news is that the Russel 2000 (small caps) held support at its 200-DMA on above-average volume, but it is still well below its 50-DMA. The Artificial Intelligence (AI) stocks that kicked off the recent bull market have “broken/busted chart patterns” as earnings have not met investors’ expectations. NVIDIA’s surprise forward guidance last quarter sparked the AI bull market rally, and they will announce earnings Wednesday after the market close. This earnings release could be pivotable for the direction of the indexes.

The Fed decreased its balance sheet by $62 billion last week, which tells me they are still fighting inflation! Rates continue to rise, indicating inflation may not be as “controlled” as the market expected. The better-than-expected retail sales last week and Fed Minutes have put Fed rate hikes back on the table. The stock market expected the Fed to pause and lower rates, but stocks are now in correction mode. China may also be in a recession, so we could catch a cold if they get sick.

Bottom line: Issachar is on defense, sitting in a short-term fixed-income ETF waiting for an FTD. The market is oversold and due for a bounce, but rates are rising. Higher rates boost the dollar, which hurts exports and growth stocks. Market direction (downtrend) impacts most stocks, so it is hard for stocks to go against the trend of the dominant index, and picking those few winners is risky. Better-than-expected earnings from NVIDIA Wednesday or positive comments from Jay Powell Friday morning could spark an over-sold rally. The market is in a downtrend (lower lows and lower highs), and IBD has labeled this decline a “Market in Correction,” so no buys until we get an FTD. AI stocks are getting hit as short-sellers pile on; therefore, risk has elevated. I believe there are times to be invested when the market is rewarding risk-takers, and there are times to sit on the sidelines, such as now. Since there are no guarantees in the market, avoiding life-changing losses (33 years of managing risk) has been the key to surviving to invest another day. Grace and Peace to everyone!

Links: Performance, Fact Sheet & Strategy, Blogs, My Story, Docs, BRI

Issachar: A Buy & Hold Alternative Actively Managed Like A Hedge Fund!

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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: 3317-NLD-08/21/2023

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