Weekly Update

01/10/2017

This is a newsletter week. The January Capital Growth Letter will be posted Saturday. We remain constructive on US stocks, expecting higher prices across the board and renewed leadership from smaller companies. Market internal indicators confirmed the most recent highs and we see no real signs of internal deterioration. One of the ways we like to monitor the market is by opening BollingerOnBollingerBands.com and letting the site serve charts at random. The front page will do that automatically if you just let it sit there. (No subscription needed.) This process can give one a good feel for what is going on under the surface. We used to try to get at the same thing by flipping through charts books, but I like this random chart process better. One thing I recently noticed is that a good number of stocks have corrected, based, and are turning higher. A good example is Revlon, REV, which is in an unloved group so I am hesitant to recommend it. However it is illustrative of a developing trend of stocks trying to turn higher and march through their recent trading ranges. The best writer of all time on the dynamics of trading ranges was Richard D. Wyckoff. I'll focus on some of his relevant ideas in this letter. There were no changes to the ETF portfolios this week. 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 512.55. 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 4, IWN 5 Country (21): EWC 4, RSX 1, EWI 3 Sector (27): IGN 4, IXG 1, SOXX 7 Until next time, I wish you well. John Bollinger, CFA, CMT Copyright 2017 by Bollinger Capital Management