Welcome to the Bollinger Band Letter Hotline for Monday the 3rd of April 2017.
This is a newsletter week, the April Bollinger Band Letter will be posted on Saturday. Did you catch that? A name change? Since 1987 the name of this letter has been the Capital Growth Letter. After 30 years it is high time for a change. Other than the name and a renewed emphasis on Bollinger Bands, you won't notice much difference. The letter will still be monthly, but we'll target the second Friday of the month rather than the third to get away from publishing in the midst of derivatives expiration. There will still be weekly updates, usually published on a Monday with the exception of the Monday after the newsletter is published. That's 12 issues a year and roughly 40 hotlines. It has been a couple of decades since we raised the price, so that will be going up, but as a current subscriber we will offer to grandfather you.
We have been in a consolidation/correction since March 1st. It has been a narrow range and volatility has been cut in half, not enough for a BB Squeeze yet, but we are on the lookout. I have been watching the market internals closely and it looks like the NYSE advance-decline line will go to a new high ahead of price and new lows have contracted, a combo which I regard as quite bullish. We remain constructive on stocks, believing that the path of least resistance is higher over the intermediate term.
Large-cap growth continues to outperform and we see that as the current leadership. We do not think that smaller stocks should be avoided; in fact they played a bit of catch-up last week and this consolidation might be a nice reentry point.
There are no changes to the ETF portfolios this week.
There are no changes to the Core portfolios this week.
There are now two new symbols available for Ice Breaker, IJR and MDY. That means we now track five Index ETFs with Ice Breaker, the Dow, DIA, The NASDAQ 100, QQQ, and the S&P small-, mid- and large-cap indices, IJR, MDY and SPY respectively. (We are still working on embedding the Ice Breaker pages in the new site. For now right click on the word "here" on the page for each symbol and select open in new tab.)
The Value Line Plan reentered the market on Friday. I wrote last week: "This feels like another signal that should be over-ridden, a review is underway." It is clear that changing market levels and conditions have created a need to update the VLP parameters. The review process is underway, so we will have an update soon.
Be careful out there!
The Value Line Plan is in the market with a Friday sell stop of 507.75.
The Value Line Geometric Index stands at 515.97.
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, 6, EWP, 1, EWT, 8.
Sector (27): XLK, 1, IXG, 7, SOXX, 2.
Details on our Allocations, Ice Breaker and our ETF portfolios can always be found online. https://www.bollingerbands.com/bb-letter/ This is a new address. On the right side of the page there are quick links to the various sections.
Until next time, I wish you well.
John Bollinger, CFA, CMT
Copyright 2017 by Bollinger Capital Management