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The Northern Star Newsletter 6/13/19 - Big Gains for the Major Indices


Message from Jon

Personal Update

Devin left for basic training Tuesday the 11th for the Air Force. It has certainly been a couple of anxious and stressful weeks with long discussions about what to expect, as well as his future and what that may be. As one might imagine, all kinds of parental memories of him flood back, and they are bitter sweet, but we are encouraged by his desire to excel and his choice to join.

Firm Update

With it being summer, you might notice a more casual and laid-back attire than normal-not quite the t-shirt and flip flops, but just a heads up.

Market Update

The month of May was anything but dull. I think we saw the markets react quite negatively to the Trade War between China and US in addition to Mexican Tariffs being used as a deterrent by President Trump to stem the tide of illegal immigration. A 6.6% decline in the S&P 500 would fall in line with a "normal" correction but certainly did not carry the feel or flavor of normal.1

With Mexico quick to avoid the entanglement with the US (with what's happening with China, who can blame them), we are back to 2 central themes that are acting like a love-hate attitude with wall street being the weighing machine: the trade War with China and the on-going belief that it will get resolved with the unknown of how long it will take weighing on everyone's mind and the FED's ongoing dialogue around interest rates.2,3

The beginning of June was met with gratitude on wall street at the thought-or shall I say, rumor-that the FED could possibly reduce interest rates rather than raise them.4 In my opinion, reducing them would not really be conducive to a solid monetary policy, since we are not yet facing any real prospect of a recession or slowing GDP or any other number of items that could suggest such a response. On the other hand, though, the opinion seems to be that we are not facing any headwinds that might suggest a raise in the rates either, but time will tell, I guess.


We saw for an 8-day period, Stormguard adjust from a bullish reading to a bearish reading, resulting in some minor adjustments in some of our more conservative client portfolios. We also have witnessed a pretty big change in Dorsey's pecking order of asset classes as well. Domestic and Foreign equities are still out front, but now Fixed Income has taken third place over commodities, cash, and currencies at present.

This shift seems corroborated with other material that I have read as of late, warning of this market condition being short-lived.5 Whenever I read and research data, one piece is never enough to act upon; however, when you see several credible sources all speaking and warning in a similar fashion, it does peak your interest to prepare, which is what we are doing. It may be next month, next quarter, or next year or longer, but when the tides change, we will certainly see who is swimming without their suit on, to quote Warren Buffet. 

Till we speak again, enjoy the days without rain!




  1. https://www.bloomberg.com/news/articles/2019-05-31/s-p-500-sleepwalk-ends-as-may-awakening-ignites-4-trillion-loss
  2. https://www.nytimes.com/2019/06/07/us/politics/trump-tariffs-mexico.html
  3. https://www.cnn.com/2019/06/11/perspectives/trade-war-china-mexico-tariffs/index.html
  4. https://www.cnbc.com/2019/06/07/its-no-longer-a-question-of-whether-the-fed-will-cut-interest-rates-but-when.html
  5. https://www.brookings.edu/blog/up-front/2019/06/06/how-will-we-know-when-a-recession-is-coming/

Big Gains for the Major Indices


The Week on Wall Street
Stocks rallied during a week in which Wall Street was buffeted by headlines. The S&P 500 rose 4.41%. The Nasdaq Composite and Dow Jones Industrial Average respectively added 3.88% and 4.71%. The MSCI EAFE index of overseas stocks improved 2.02% across five days.[1][2]

Following a mixed Monday, the market jumped Tuesday after dovish remarks from Federal Reserve Chairman Jerome Powell. Breaking out of a 6-week losing streak, the Dow had its best week since November.[3]

Jerome Powell's Comments
Speaking at the Federal Reserve Bank of Chicago, the Fed chair stated that central bank officials "will act as appropriate to sustain the expansion" of the economy in the face of "recent developments involving trade negotiations and other matters."[4]

The next 2-day Fed policy meeting ends on June 19, with a press conference to follow.[5]

Hiring Cools
Employers added just 75,000 net new jobs to their payrolls in May, according to the Department of Labor. Economists polled by Reuters thought that the gain would be 185,000. The main unemployment rate held at 3.6% last month; the U-6 rate, which includes the underemployed and those who have stopped looking for work, fell 0.2% to 7.1%.[6]

To some analysts, the weak May hiring number hinted at private-sector concern over tariffs. To others, it simply signified the possibility that the economy may be at or near full employment.[7]
Final ThoughtWhile breaking news does often merit investor attention, refrain from letting the headlines of the moment prompt you into emotional decisions. Brace yourself for further headlines that may drive market volatility because new developments are arriving quickly in the financial markets.
Wednesday: The latest Consumer Price Index, showing the rate of inflation in May and across the past 12 months.
Friday: The Census Bureau's May retail sales report as well as the University of Michigan's initial June consumer sentiment index, measuring consumer confidence levels.

Source: Econoday / MarketWatch Calendar, June 7, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

Tuesday: H&R Block (HRB)
Wednesday: Lululemon Athletica (LULU)

Thursday: Broadcom (AVGO)

Source: Morningstar.com, June 7, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.


Quote Of The Week

Fountain Pen

"You may have to fight a battle more than once to win it."
-Margaret Thatcher

Recipe Of The Week

Fork and Knife

East Coast Crab Cakes

Serves 6


Crab Cakes
  • 2 eggs
  • 2 to 3 Tbsp. mayonnaise
  • 1 to 2 tsp. Dijon mustard
  • 1 tsp. Worcestershire sauce
  • 1 tsp. Old Bay seasoning
  • ¼ tsp. salt
  • ¼ tsp. freshly ground pepper
  • ¼ cup celery, finely diced
  • 2 Tbsp. fresh parsley, finely chopped
  • 1 lb. lump crab meat
  • ½ cup panko breadcrumbs
  • Canola oil (use enough to cook the crab cakes)
Tartar Sauce
  • 1 cup mayonnaise 
  • 1½ Tbsp. sweet pickle relish
  • 1 tsp. Dijon mustard
  • 1 Tbsp. red onion, finely chopped 
  • 1 to 2 Tbsp. lemon juice 
  • Salt and freshly ground black pepper, to taste

Crab Cakes
  1. Use a baking sheet and line with aluminum foil.

  2. Make the crab cake mix by combining the eggs, mayonnaise, Dijon mustard, Worcestershire, Old Bay seasoning, salt, celery, and parsley in a large bowl, and mix well. 

  3. Before you add the crab meat, inspect it for any shells or sharp bits, then combine into the mixture. Add the crab meat and panko with a rubber spatula; gently fold the mixture as to not to shred the crab meat. Mix just until the ingredients come together - be sure that you don't overwork the mixture.
  4. Shape the crab mixture into 6 crab cakes (each about ½ cup) and place on the prepared baking sheet. Allow the cakes to set in the refrigerator for an hour.
  5. Bring a large nonstick pan to medium heat and add canola oil. Once the oil is hot, add the cakes and cook each side until golden brown, about 3 to 5 minutes per side. Be careful as oil may splatter. Season the cakes with salt right when they come out of the pan and serve right away with tartar sauce and a squeeze of lemon.
Tartar Sauce
  1. Combine all of the ingredients in a small bowl and mix until it comes together. Keep chilled until ready to serve.

Recipe adapted from Once Upon a Chef[8]


Tax Tips


Penalty Relief

If you make a mistake on your income taxes, you may receive a penalty from the IRS. In some circumstances, the IRS can provide relief from certain penalties, such as:
  • Failing to file a tax return

  • Failing to pay on time

  • Failing to deposit certain taxes as required
Types of penalty relief offered by the IRS: Reasonable CauseIf you can show that you tried to meet your obligations, but didn't succeed in doing so, you may be forgiven. Some circumstances would be a house fire, a natural disaster, or a death in the family. Administrative Waiver and First-Time Penalty AbatementRelief may be possible if you:
  • Didn't previously have to file a return or had no penalties for the three years prior to the IRS assessed penalty.
  • Filed all currently required returns or filed an extension of time to file.

  • Paid or arranged to pay any tax due.
Statutory ExceptionIt's possible you've received incorrect written advice from the IRS, which may result in an exception. *This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
 Tip adapted from IRS.gov[9]


Golf Tip


Bend the Ball

If you find yourself close enough to a tree or water hazard that you need to curve the ball around it, a good setup is essential.

Begin by pointing your feet, knees, and shoulders where you want your ball to start. Typically, this will be pointing slightly away from the obstacle.


Then, aim the face of your club where you want your ball to land. Finally, swing along the line of your body and watch the ball curve around the obstacle to end up at the target.


Don't try and aim the ball with your arms; instead, use the line of your body to guide the swing.

Tip adapted from Golf Tips Magazine[10]

Healthy Lifestyle

Medical Cross

Unplug to a New Activity

Constantly being wired up, plugged in, and online can actually cause stress. It can also be hard to put down your smartphone or similar device. By doing so, you might be missing out on time spent cultivating other interests and participating in other activities that can enrich you, relax you, and help you to be more mindful and present. Here are a few ideas:


Get outside and get some steps in. Walking and fresh air can work wonders on regrouping and resetting to an unplugged state. You can start in your own neighborhood or visit a local park or beach.


Take a staycation. Explore your town as if you were visiting. There may be some hidden gems like restaurants or museums you never knew existed.


Class is in session. Take a class in something you're interested in, like art, music, history, or literature. Many cities have community colleges and adult education programs.


Read. Read a book. Real paper, with words, a spine, and covers. Make an outing of going to the bookstore to see what's out there, and pick up a book, magazine, or journal.

Tip adapted from HuffPost[11]

Green Living


I'll Bet You Didn't Know You Could Recycle This

Recycling. It can get so complicated. Who's to know what will be recycled and what will end up in a landfill? Well, this list of items that you probably haven't considered can actually be recycled. Check it out:

  1. Cigarette Butts. TerraCycle, a firm that specializes in recycling difficult items, can separate out the tobacco, paper, and plastic. The tobacco and paper are composted, while the filter is converted to pellets for resale. 

  2. Toilets. If you like to walk and drive, chances are you're doing it on a recycled toilet. Sidewalks and roads are constructed of a mixture that includes recycled porcelain and other fixtures.

  3. Wine corks. Your corks can be recycled and repurposed into shoes and other items. The organization ReCORK just may have a drop off location in your area. Check their website at https://recork.com/
Tip adapted from Mic[12]

Share the Wealth of Knowledge!


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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.


Diversification does not guarantee profit nor is it guaranteed to protect assets.


International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.


The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.


The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.


The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.


The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.


The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.


Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.


Past performance does not guarantee future results.


You cannot invest directly in an index.


Consult your financial professional before making any investment decision.


Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.


These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.


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Dorsey, Wright & Associates, LLC is a subsidiary of Nasdaq, Inc. Nasdaq, Inc. is a publicly-traded corporation (NDAQ). Its subsidiaries include The Nasdaq Stock Market LLC, Nasdaq PHLX LLC and Nasdaq BX, Inc., all of which are SEC-registered national securities exchanges, Nasdaq Execution Services, LLC, a registered broker-dealer that routes orders in equities and options to the appropriate market center for execution, Chi-X Canada ATS Ltd., a Canadian alternative trading system for the trading of TSX and TSXV-listed securities, and Nasdaq Futures, Inc., a CFTC Designated Contract Market for the trading of energy futures in oil, gas, and U.S. power. Nasdaq, Inc. also has subsidiaries that are foreign securities exchanges that receive listing and trading fees.Dorsey Wright will not publish research or make recommendations concerning NDAQ, nor trade the security for its Investment Management clients. Dorsey Wright may, however, publish research on, recommend or trade other securities listed on the Nasdaq exchanges, which receive fees from the listed companies and futures. Dorsey Wright will not take into account where a security is listed or traded in exercising its independent judgment for clients. In addition, Dorsey Wright does not manage or control where clients' broker/dealers route orders for execution. Accordingly, client orders may be routed to the subsidiaries of Nasdaq, Inc. for execution. These markets receive trading fees.Nasdaq, Inc. and its subsidiaries receive index licensing fees from investment product sponsors, as well as index calculation fees from index providers. These fees may be asset based. With respect to ETFs and other investment products for which Nasdaq, Inc. or its subsidiaries may receive licensing or asset-based fees, Dorsey Wright may, from time to time, (i) recommend such an ETF or other investment product in research for which Dorsey Wright receives fees; (ii) include such an ETF or other investment product in models or indexes for which Dorsey Wright receives an asset based fee; and/or (iii) recommend or include such an ETF or other investment product in the investment management accounts. While Dorsey Wright does not receive any portion of Nasdaq's fees directly, the firm may indirectly benefit as a subsidiary that is part of a Nasdaq business unit. To manage this potential conflict of interest, in the case of Dorsey Wright research or index and model licensing, Dorsey Wright would only include the Nasdaq investment product if the product helps to meet the stated objectives of the strategy and it otherwise meets the rules-based methodology associated with the strategy. In the case of the investment management accounts, Dorsey Wright will only recommend or include the Nasdaq investment product when the recommendation is suitable and meets the client's stated investment objectives. Dorsey Wright will not take into account the fees received by Nasdaq, Inc. and its affiliates in exercising Dorsey Wright's independent judgment for clients.Some performance information presented on this website is the result of back-tested performance. Back-tested performance is hypothetical and is provided for informational purposes to illustrate the effects of the strategy during a specific period. The hypothetical returns have been developed and tested by DWA, but have not been verified by any third party and are unaudited. Back-testing performance differs from actual performance because it is achieved through retroactive application of a model investment methodology designed with the benefit of hindsight. Model performance data (both back-tested and live) does not represent the impact of material economic and market factors might have on an investment advisor's decision making process if the advisor were actually managing client money. Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur.There are risks inherent in international investments, which may make such investments unsuitable for certain clients. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. DWA, and its affiliates make no representation that the companies which issue securities which are the subject of their research reports are subject to, or in compliance with certain informational reporting requirements imposed by the Securities Exchange Act of 1934. Sales of securities covered on this site or in this report may be made in only those jurisdictions where such securities are qualified for sale. Investors in securities with values influenced by foreign currencies, effectively assume currency risk, because foreign-currency-denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of, or income derived from, such securities.Options trading involves risk and is not suitable for all investors. When participating in a covered call strategy, the investor is at risk of having to sell the stock if the stock's price rises above the strike price. Remember, in exchange for receiving the premium of having sold the calls, the investor is obligated to sell the stock if the option is exercised. The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. There may be instances when fundamental, technical, and quantitative opinions may not be in concert.

[1] www.wsj.com/market-data

[2] quotes.wsj.com/index/XX/990300/historical-prices

[3] www.cnbc.com/2019/06/07/us-futures-edge-higher-as-wall-street-rally-set-to-continue-jobs-data-in-focus.html

[4] www.cnbc.com/2019/06/04/powell-says-the-fed-will-act-as-appropriate-to-sustain-the-expansion.html

[5] www.federalreserve.gov/newsevents/calendar.htm

[6] www.reuters.com/article/us-usa-economy-instant/us-may-payrolls-rose-less-than-expected-idUSKCN1T81GG

[7] www.reuters.com/article/us-usa-economy-instant/us-may-payrolls-rose-less-than-expected-idUSKCN1T81GG

[8] www.onceuponachef.com/recipes/maryland-crab-cakes-with-quick-tartar-sauce.html

[9] www.irs.gov/newsroom/heres-what-taxpayers-should-know-about-penalty-relief

[10] www.youtube.com/watch?list=UUPLAYER_GolfTipsMag&v=R5RzutKGLtM

[11] www.huffpost.com/entry/unplug-from-technology_n_2762116

[12] www.mic.com/articles/190389/how-to-use-less-plastic-in-your-everyday-life

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Summit Financial Group of Indiana
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