Weekly Update

September 29, 2018

 

Welcome to the Bollinger Bands Letter Update for Saturday September 29, 2018.

 

Our FAANG Index remains in the middle of its four month trading range, we guess that there is still too much speculative interest and that emotions will have to cool farther before any progress can be made. FAANG looks like dead money until late in the year at best.

 

The S&P 500 is in a Bollinger Band Squeeze and we are looking for an expansion of volatility. The weight of the evidence suggests a downside move, but there is little price confirmation yet from the leadership.

 

Larger stocks have taken the lead, while smaller stocks are in a correction. The advance – decline line has not confirmed the recent highs in the indices. New lows are expanding and new highs contracting. The market got short-term over bought last week while its internal condition weakened a bit. It seems we are on track for a fall correction and buyable low.

 

My least favorite sector from an analytical perspective, gold, is working on a tradable bottom with some confirmation from the stocks.

 

Health, energy and commodities are the best performing sectors with finance and basic materials weakening.

 

Interest rates continue to rise.

 

The international markets tone has improved a bit, but not much.

 

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 582.86 the Friday sell stop stands at 577.81.

 

The ETF Program portfolio holdings:

Style (21): IVV, 4, IWF, 3, IVW, 1.

Country (21): EWQ, 7, EWL, 3, EWA, 12.

Sector (27): XLK, 7, PSJ, 5, XLY, 3.

 

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:

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

 

Until next time, I wish you well.

 

John Bollinger, CFA, CMT

 

Copyright 2018 by Bollinger Capital Management, Inc.

 

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