June 29, 2017
Welcome to the Bollinger Band Letter Hotline for Thursday the 29th of June 2017.
Another small volatility event today. With the S&P 500 down 1.4% on an intraday basis, the Volatility Index (VIX) was up more than 50%. The problem is that with so much hedging being done with the VIX and so many sell strategies now tied to increases in the VIX, a higher VIX leads to lower stock prices in a virtuous feedback loop. I fully believe that this will be the motive force behind a stock-market crash at some point. On an intraday basis Ice Breaker buys were generated, but none were recorded as the rally in the second half of the day carried prices well above trigger levels.
Our outlook is still positive, but we shall reassess over the weekend.
A lagniappe: As part of your Bollinger Band Letter subscription I have been working on a set of market-timing charts that you can find as a PDF file in the paid user area under Market Timing Report. These are some of the raw charts that I use in my market-timing work. Highlights and commentary will appear in the Weekly Updates and in the Bollinger Band Letter. While we urge you not to redistribute the newsletter or our weekly updates, you may feel free to redistribute the Market Timing PDF. This is very much a work in progress. There are currently 12 charts, all of which feature the S&P 500 and an indicator. They are daily charts with one year's worth of data:
1. Bollinger Bands with %b
2. Bollinger Bands with BandWidth
3. NYSE Advance – Decline Line
4. NYSE 21-day Advance- Decline Oscillator
5. NYSE 21-day Up – Down Volume Oscillator
6. S&P 500 / Value Line Geometric Average Ratio
7. NYSE New 52-week High and Low Histogram
8. NYSE High Low Index (Abe Cohen)
9. NYSE High Low Logic Index (Norm Fosback)
10. 21-day Intraday Intensity (David Bostian)
11. 10-day Open Arms Index (Richard Arms)
12. The Volatility Index (VIX)
I intend to post the Market Timing Report once a week, on Saturday. Comments on this additional service are most welcome: firstname.lastname@example.org
Be careful out there!
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