June 5, 2017
Welcome to the Bollinger Band Letter Hotline for Monday the 5th of June 2017.
Our outlook for stocks remains positive. The NYSE advance-decline line continues to climb to new highs confirming the price action in stocks. New lows are minimal and new highs are expanding nicely. Participation is broad. In short, the US stock market seems to be calmly working its way higher with little in the way of worries on the horizon.
The one worry is that the Fed is raising rates. In our view they are simply returning interest rates to equilibrium, not tightening. Confirmation of that idea comes from M2, a broad measure of money supply, which is still growing at a 5.9% annualized rate. That is very strong monetary growth, well above the rate of inflation.
Smaller stocks did a bit of catching up last week, while growth remains dominant over value.
Our favorite international leading index, the UK's FTSE 100, continues to do well despite the recent terror attack. To out British friends: We recall your strength in times of adversity, which all the world admire. Keep calm and carry on!
There are no changes to the ETF portfolios this week.
There are no other changes for now.
Ice Breaker continues to hold a single position for each of the five monitored ETFs.
Be careful out there!
The Value Line Plan is in the market with a Friday sell stop of 511.98.
The Value Line Geometric Index stands at 522.35.
The current allocations are:
70% US stocks, 10% International, 10% Yield and 10% Cash.
The ETF Program portfolio holdings:
Style (21): IUSG, 3, IWF, 1, IWB, 5.
Country (21): EWO, 1, EWP, 9, EWN, 2.
Sector (27): XLK, 3, IGV, 2, SOXX, 6.
Details on our Allocations, Ice Breaker and our ETF portfolios can always be found online:
Until next time, I wish you well.
John Bollinger, CFA, CMT
Copyright 2017 by Bollinger Capital Management