September 23, 2017
Welcome to the Bollinger Band Letter Hotline for Saturday the 23rd of September 2017.
Mid-sized and smaller stocks are making a strong comeback and value is seeing an uptick. In addition there is a lot of group and sector rotation going on as portfolio managers try to align their portfolios for coming trends in a very uncertain environment. Our FAANG Index continues to lag, largely due to Apple. However, that may not be the negative it appears to be; it may just be part of the market's rotation. In fact I am looking for an entry point for AAPL. In classic technical analysis speak, AAPL is in the midst of a relative-strength pivot, which is a continuation pattern. From a psychological viewpoint Apple is also in a classic pattern, a ramp up into a major announcement followed by the post-adrenaline blues.
We still think that there is substantial risk of a fall pullback, but this is a strong market and it should not be underestimated. Any such pullback would almost certainly lead to a low-risk reentry point. We are comfortable with our allocations as they stand, though we recognize that we are risking a bit of under-performance by safeguarding against a pullback.
Finally, the VIX is down to levels that have ushered in a volatility event before, so maybe a volatility driven event will usher in the fall lows.
With the Value Line Geometric at 530.28, the Value Line Plan is in the market with a Friday sell stop of 517.61.
The current allocations are:
50% US stocks, 10% International, 10% Yield and 30% Cash.
The ETF Program portfolio holdings:
Style (21): IUSG, 7, IWF, 2, IWB, 1.
Country (21): EWO, 2, EWI, 1, EWN, 4.
Sector (27): IXJ, 4, IGV, 9, PSJ, 1.
Ice Breaker reporting is currently down. Details on our Allocations and our ETF portfolios are here:
Until next time, I wish you well.
John Bollinger, CFA, CMT
Copyright 2017 by Bollinger Capital Management