August 13, 2017
Welcome to the Bollinger Band Letter Hotline for the 13th of August 2017.
The Value Line Plan exited the market on Friday; as indicted previously we are using this signal to implement an additional cut our allocation to US Stocks by 10% to 50% in favor of cash. The truth is that I am not expecting a big decline but there are a number of factors that suggest reducing risk in this environment. You can use IJR, IWM, EQAL and XIV to reduce exposure. I fully expect to add all of this exposure back later in the year.
One interesting risk indicator is our version of Bill Ohama's Titanic Syndrome, which now appears on chart 8 of our weekly market-timing package. The stage was set by three preliminary signals, which I refer to as "on-board". They occurred on July 12, 13 and 14. Confirmation came from five primary signals, which I refer to as "sinking". They came on August 1, 2, 3, 4 and 7. Final confirmation came from a Wyckoff Upthrust of the 8th. (Our version of Bill Ohama's work is quite a bit different in implementation from the original, but not in concept. I choose to keep the name of give credit to the man who did the original work.) Next week is a newsletter week. I plan to discuss all this at length. In the meanwhile as Sergeant Phil Esterhaus of Hill Street Blues would always say: "Hey, let's be careful out there."
There is one change to the ETF portfolios this week, sell EWY and buy EWS, which is a switch from South Korea to Singapore.
The Value Line Plan exited the market this week, with the Value Line Geometric at 510.99, the Friday buy stop is now 518.90.
The current allocations are:
50% US stocks, 10% International, 10% Yield and 30% Cash.
The ETF Program portfolio holdings:
Style (21): IUSG, 3, IWF, 2, IWB, 4.
Country (21): EWO, 1, EWS, 3, EWN, 2.
Sector (27): IXJ, 10, 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