July 30, 2017
Welcome to the Bollinger Band Letter Weekly Update for 30 July 2017.
I made quite a bit of progress this week on our Market Timing charts package. The biggest change was reordering and properly grouping the charts. In addition, we now use the NYSE Composite as the comparison for the charts with indicators derived from NYSE data. The theoretical Dow now appears in the last two charts, Intraday Intensity and Deviation from Average. I have also added one-, three- and six-month averages to chart four as a set of basic trend guidelines. I plan to do more along those lines to increase information density going forward. Thus, chart four with its trend information and depiction of the balance between larger and smaller stocks can serve as an example of displaying several types of timing information in a single view. I am pleased that the dip into negative territory by Intraday Intensity (Chart 12) has ended and will monitor this series carefully for confirmation of market strength. Note also the strength in the NYSE advance – decline line and the lack of new 52-week lows. All told, this is a pretty strong looking set of charts this week.
We saw another small volatility event this week in which a small move in the indices and a much larger move in the Volatility Index were coupled. I continue to think that this relationship will be an important/dominant one as we move forward.
Even though we have broken out to new highs in the indices the rotational correction continues. One interesting item was the energy sector gaining some traction. If we do see some sustained strength there, I'd use it to continue to lighten up our longer-term commitment to the sector. There is little differentiation between growth and value, or by stock size.
Our outlook for US stocks remains positive and we suspect that there may be some interesting potential being developed by pullbacks in some key international markets.
There are no changes to any of the portfolios this week.
The Value Line Plan is in the market with a Friday sell stop of 517.54. The Value Line Geometric Average stands at 528.66.
This week's Market Timing Charts have been posted.
The current allocations are:
70% US stocks, 10% International, 10% Yield and 10% Cash.
The ETF Program portfolio holdings:
Style (21): IUSG, 2, IWF, 3, IWB, 4.
Country (21): EWO, 1, EWY, 10, EWN, 3.
Sector (27): IXJ, 7, IGV, 4, IXG, 1.
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