August 5, 2017
Welcome to the Bollinger Band Letter Weekly Update for 05 August 2017.
The emphasis has shifted back to large stocks with growth and value being a push while a lot of rotation continues under the surface. I can't quite put my finger on it, but I am starting to get a bit nervous about stocks. The worst time of the year to own stocks is just ahead of us, the advance decline line has flattened and has not confirmed the recent highs, there has been a small bump up in the number of new lows, the VIX is very low, valuations are very high, mid-sized and smaller stocks are lagging, the High Low Index has rolled over from a high level, interest rates are rising, and the High Low Logic Index has turned up. None of these things are damning on their own, but taken together I am feeling uncomfortable enough to cut back our allocation for US stocks to 60% (from 70%) in favor of cash. I know that it is a small step, and it'll either be wrong, in which case it'll be easily reversed, or it'll be the first of several cuts leading to a bottom and buying opportunity late in the year. To put this succinctly, I feel that it is time to pay attention.
There are no other 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 523.62.
This week's Market Timing Charts have been posted.
The current allocations are:
60% US stocks, 10% International, 10% Yield and 20% Cash.
The ETF Program portfolio holdings:
Style (21): IUSG, 4, IWF, 2, IWB, 3.
Country (21): EWO, 1, EWY, 12, EWN, 3.
Sector (27): IXJ, 7, IGV, 6, 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