September 8, 2018
Welcome to the Bollinger Bands Letter Update for Saturday September 8, 2018.
Several intermediate-term market-timing approaches that we track signaled sells last week as the advance-decline lines rolled over, more new lows were recorded than new highs, and the High Low Logic Index surged in proximity to record market highs. Weakness in the international equity market was another negative factor. We had thought that we might pass over the usual fall decline, but we now view the odds of a meaningful stock-market correction as high. We do not think that this is an important stock-market top, but the outlook for a correction for which we should field some defense seems quite strong. We are cutting back our allocation for US stocks to 50% and canceling our recommendation that aggressive accounts hold 70%. The new allocations for all are 50% US stocks and 30% cash. Conservative accounts may wish to hedge additional exposure. We view this as potentially a garden-variety fall correction that will lead to an important opportunity to own stocks for the best part of the investing year and expect to put the money back to work in the relatively near future.
Sell these Core positions XLB, GE and VOX, EWG from International and UBS from Dividend.
Be careful out there!
There were no changes to the ETF portfolios this week.
The Value Line Program remains in the market; with the Value Line Geometric Average at 582.29 the Friday sell stop stands at 577.81.
The ETF Program portfolio holdings:
Style (21): IJT, 1, IWF, 5, IVW, 6.
Country (21): EWQ, 8, EWL, 1, EWA, 9.
Sector (27): XLK, 8, PSJ, 3, XLY, 4.
Our allocations are 50% US stocks, 10% international, 10% yield and 30% cash.
Details on our Allocations, Ice Breaker positions and ETF portfolios along with our weekly Market Timing Chart Pack can be found here:
Until next time, I wish you well.
John Bollinger, CFA, CMT
Copyright 2018 by Bollinger Capital Management, Inc.