Oversold Short Covering FTD Rally! The Issachar Fund holds about 3% in an inverse bond fund ETF and 97% in a high-yielding short-term fixed-income ETF! My perception of risk is high as yields continue to climb. The oversold tech-heavy NASDAQ index bounced off a line of support, rallying 1.6% on greater volume, producing a Follow Through Day (FTD), according to Investor’s Business Daily (IBD). According to IBD rules created by William O’Neil, I will be looking for stocks to buy near pivot points, but I believe this was just a short-covering oversold bounce-off support. However, I will follow my discipline and rules because the market knows best. (There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.)
The Fed sold another $46 billion of bonds last week, pushing interest rates higher! The Fed claims to be bringing inflation down by raising the Fed Funds rate (the rate banks charge each other for overnight loans), which makes it harder for businesses to expand, slowing economic growth. If companies can’t grow and profit, they cut their largest expense: labor. If businesses cut jobs, unemployment rises, more people rely on the government, and higher taxes are inevitable. The real reason we have inflation is because the Fed printed too much money chasing too few goods. Congress spent over $33 trillion of debt, so the Fed created money to buy the debt foreigners had enough of. I do not see an easy way out of this cycle of debt as the Fed makes more money to pay the interest on existing debt, which creates more inflation. At this rate of money creation, interest on our national debt next year will be our greatest expense in next year’s budget. Just imagine all federal tax collections will soon be used to pay interest on things we already consumed. The Fed will eventually print too much money, something will break, and we could take decades to pay for our mistakes. If that happens, I plan to make money by shorting (betting prices will decline) stocks and indexes as buy-and-hold investors ride the market lower.
Bottom line: The market produced an FTD on Friday, so I am looking for stocks with accelerating sales and earnings to buy near-price consolidations. I believe Friday was an oversold short-cover rally because interest rates continued to climb. Higher rates are not good for stocks, bonds, or the economy. The dollar finished lower, and gold finished higher Friday, both on above-average volume, so it may be time to consider gold. Grace and peace to Everyone!
The grace of the Lord Jesus Christ be with your spirit. Philemon 1:25
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., a member of 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. NLD Code: 33408-NLD-10/09/2023