Welcome to John Bollinger's Capital Growth Letter Hotline for Monday the 13th of March 2017.
This is a newsletter week, the March Capital Growth Letter will be published on Saturday.
Large-cap growth continues to outperform. The best part of the relative gains have been against smaller-cap stocks with lesser gains against mid-caps and value. I guess we could call this a style-based correction. We were looking for a more broadly-based correction. But with the large-caps halting at the middle band while mid-sized and small stocks have tagged their lower bands it looks like a style correction is what the market needs. Confirming the idea of a correction the advance - decline line has pulled back along with prices and four of the last five trading days have featured more new lows than new highs. In addition, there has been meaningful group and sector rotation. This is looking and feeling like a garden-variety stock-market correction. Our outlook on the market remains constructive and a major focus of the letter will be the opportunities being created.
There are no changes to the ETF portfolio this week.
There are no changes to the Core portfolios this week.
All aspects of BollingerBands.com are working as intended, including the automated Ice Breaker reports. Ice Breaker has four open positions, two in SPY and two in QQQ.
The Value Line Plan nearly exited the market last week. I have a feeling that it is time to revisit the VLP algorithm as it seems like we are getting too many signals. The current algorithm was set when the index was much lower and may be too sensitive at these levels. An example is last week's action where a signal was nearly triggered by a one-day dip below the trigger level. I am starting a full review.
Be careful out there!
The Value Line Plan is in the market with a Friday sell stop of 512.57.
The Value Line Geometric Index stands at 515.75.
The current allocations are:
70% US stocks, 10% International, 10% Yield and 10% Cash.
The ETF Program portfolio holdings:
Style (21): IUSV, 8, IWF, 1, IWB, 5.
Country (21): EWO, 2, EWA, 6, EWT, 11.
Sector (27): XLK, 1, IXG, 2, SOXX, 6.
Details on our Allocations, Ice Breaker and our ETF portfolios can always be found on the Capital Growth Letter web site.
Until next time, I wish you well.
John Bollinger, CFA, CMT
Copyright 2017 by Bollinger Capital Management