August 28, 2017
Welcome to the Bollinger Band Letter Hotline for Monday, the 28th of August 2017.
What a difference a week can make. The internal condition of the market improved substantially last week, so it is now possible to imagine a rally to a new high. I am not by any means convinced that will be the case, but one must keep an open mind. When I reviewed my weekly numbers I fully expected them to be worse, but they were better. Wait-and-see is now the name of the game; we should know pretty quickly what the verdict will be.
It is time for a change. The Value Line Plan, which has stood us in good stead for a long, long time, just isn't performing as well as it once did. Whether it is a change in the Value Line Geometric Average—I hear that there has been a lot of change at the parent company, a change in the market, or a need for a change in the rules I cannot be sure. What I do know is that I no longer feel that in an environment that has become as noisy as our capital markets have, a system as simple and direct as the VLP, no matter how elegant, can serve in such an important role.
This past weekend I was in San Francisco, which is why this update is late, and I had a lot of time to think about a VLP replacement. While teaching a Bollinger Band class* an elegant solution occurred to me. I have already coded the first (simplest) version and it seems to be working as I had hoped. I'll try to have the development done by the time I write the September Bollinger Band Letter. Until then with the Value Line Geometric at 509.73, the Value Line Plan is out of the market with a Friday buy stop of 511.85.
*I often feel that I learn more than the attendees at these classes. It seems like it is the prep time and focus on the material that is key in setting the stage for something interesting to emerge, but often it is the questions, the answers to which can set one to thinking.
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, 7, EWN, 4.
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