September 5, 2017
Welcome to the Bollinger Band Letter Hotline for Tuesday, the 5th of September 2017.
We added one new chart to our market-timing chart package this week, for a total of 15. The new chart presents BBTrend and is in position three. The first three charts now depict the core of the Bollinger Band approach to trading the markets. %b tells us were we are in relation to the Bollinger Bands, BandWidth tells us how wide the Bollinger Bands are, and BBTrend alerts us to changes in trend. Taken together, these three charts can provide a great deal of useful market-timing information. BBTrend utilizes the differences between two sets of Bollinger Bands to derive its trend information, 20-day (cyan on the chart) and 50-day (magenta). There are still a few more charts to come; in the immediate future we will focus on a general clean-up and some code optimizations to allow us to more easily add charts and indicators in the future. As always, your comments on this project are most welcome, firstname.lastname@example.org.
There was a minor uptick for smaller stocks last week and growth continues to maintain a slight edge over value. The most interesting thing is that the NYSE advance – decline line went to a new high Friday while the chart of the S&P 500 looks like a complex top pattern. We expect to see continuing cross currents like these into the fall and are comfortable with our reduced equity allocations. Confirming this cautious view is the action in the international markets where the FTSE, Nikkei 225 and DAX remain in down trends.
The Value Line Plan reentered the market Friday. With the Value Line Geometric Average at 516.88 the Friday sell stop for the trend following approach stands a t 505.66. We are working on a replacement for this approach that will be discussed in the next letter.
Really, be careful out there.
There are no changes to the ETF program this week.
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