Weekly Update

May 19, 2018

Welcome to the Bollinger Bands Letter Weekly Update for Saturday May 19th, 2018.

The FAANG stocks are having a lot of trouble getting through to a new high. They have been turned back three times. The reason is that leadership is shifting to small-cap stocks with an emphasis on small-cap growth. That makes a lot of sense as at these valuations you need growth to justify investing and small-cap stocks have better growth prospects than their larger, market-dominant brethren. We view this as very helpful and sustainable.

Our outlook for stocks remains positive; we see no signs of a top or a nascent downturn at this time. If you need to put money to work a small-cap growth fund like IJT that Sector Selector just switched into is a great place.

There are two changes to the ETF portfolios this week, sell IUSG and buy IJT which is a switch from large-cap to small-cap growth; sell EWI and buy EWU, which is a switch from Italy to the UK. It seems that investors don’t like the Italian election results, but they are loving the royal wedding.

I’ll be working from the road for three weeks and our physical office will be closed. Even so, it’ll be business as usual. If you need anything just email or call and leave a message. (There may be some time zone delays.)

The Value Line is in the market. With the Value Line Geometric at 566.41, the Friday sell stop is 553.62.

The ETF Program portfolio holdings:

Style (21): IJT, 1, IWF, 9, IWO, 4.

Country (21): EWS, 6, EWU, 1, EWH, 5.

Sector (27): XLK, 7, PSJ, 2, XLY, 8.

Details on our Allocations, Ice Breaker positions and ETF portfolios along with our Market Timing Chart Package can be found here:

https://www.bollingerbands.com/bb-letter/

Until next time, I wish you well.

John Bollinger, CFA, CMT