Caution Flags Are Flying, but This Money Manager Is Still Invested

(Unsplash/Bob Ghost)

The Issachar Fund (LIONX, BRI, ESG) is 58% invested in 22 leading growth stocks on Sunday, Sept. 20, 2020. I did some buying and selling last week to realign LIONX with the current technical pullback. The NASDAQ 100 Index (NAZ) is trading below its 50-day moving average on higher volume, but it is holding its recent line in the sand, so I am constructive and encouraged. I believe this is a normal correction in an uptrend that may need a little time to digest recent gains, and it is not a fundamental change like we saw in February.

The stock leaders are still hanging in there, and new leaders appear to be emerging out of bases, so I believe the rally yet may have more legs. I see a lot of sector rotation, and I think that is a good sign versus the money going cash. Sector rotation historically tends to keep things propped up, so I remain cautiously invested. As long as the money stays "in the market," I believe it will find a place where it is welcomed, and that is where I am hunting this season. (There is no guarantee that any investment will achieve its objectives, generate positive returns or avoid losses.)

The Fed increased its balance sheet last week by $54 billion. When the Fed buys $54 billion of bonds, the proceeds often have a way of trickling down into the stock market, lifting many boats. I believe the Fed has our back and will do whatever is necessary to support the market and the economy to ensure a Trump victory. The Fed announced last week that it plans to keep interest rates near zero until 2023. That is an enormously powerful statement that can create a considerable degree of certainty for companies to plug into their business planning models. Lower interest rates often correlate to a weaker currency, which can help exporting companies. As companies export more, their profits typically rise, especially when they convert their overseas earnings into local dollars. A weak dollar helps with exports, which helps with our trade imbalance, and the more we export, the more America tends to profit.

Bottom Line

The Nasdaq is down about -12% from its recent high on Sept. 2, and I believe the correction may have run its course. I see money slopping and chopping in the market going from stock to stock and not a lot of money going to cash as I saw in February, so I am bullish, but caution flags are flying. Many stock leaders that led us out of the March low have been beaten up pretty bad in this technical correction, but I do not see this as a fundamental shift as we saw in February. We may need a little time for the leaders to take a breather and form new bases. However, I am still finding new leaders with accelerating earnings and sales and constructive chart patterns. I believe the Fed is still on our side, and I do not see that changing anytime soon, so I expect a rising tide of newly created Fed money to lift many boats.

I am proud to be an American but more proud to be a son of the Most High God. I pray you know who are and whose you are and fulfill your God-given destiny.

"Because you are sons, God has sent forth the Spirit of His Son into our hearts, crying, 'Abba! Father!' Therefore you are no longer a slave, but a son; and if a son, then an heir of God through Christ" (Gal. 4:6-7, NASB)

Click here for the LIONX 2nd Quarter Fact Sheet.

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Note: 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 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. Ratings are only one form of Fund performance and should not be used as the sole consideration in making an investment decision. For more information regarding the fund, including current performance, please visit issacharfund.com. For more information on LIONX, please visit LIONX.net. NLD Review Code 3995-NLD-9/21/2020.

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