Special Update


Welcome to John Bollinger's Capital Growth Letter Special Update for Wednesday the 28th of December 2016. Dow Jones Industrial Average 20,000 ho! I considered writing about this important milestone in the December Capital Growth Letter, but it seemed far enough off that it would hold until January. However, December 7th's rally has put this psychologically important number front and center as we draw into the end of the year. 20,000 is a major milestone for the Dow and we can expect the market to respect it. Thankfully it is not one of those power-of-ten milestones, like 100, 1,000 and 10,000, as they were capable of stalling progress for years. The normal pattern around an important milestone is to stall beneath it--the more important the milestone, the longer the stall--then, after it has been crossed, to retest it from above with the ensuing rally closing the pattern. We expect something like that this time. Even so our outlook for stocks remains positive and we believe the pullbacks should be bought. Clearly 20,000 has everyone's attention and until we decisively clear that mile marker it will be a major component of market mind share. Be careful out there! The Value Line Plan is in the market with a Friday sell stop of 506.45. The Value Line Geometric Index stands at 508.19. The current allocations are: 60% US stocks, 10% International, 10% Yield, 10% Forex and 10% Cash. The ETF Program portfolio holdings: Style (21): IUSV 2, IJJ 5, IWN 1 Country (21): EWC 6, RSX 1, EWJ 7 Sector (27): IGN 7, IXG 2, SOXX 3 Until next time, I wish you well. John Bollinger, CFA, CMT