Weekly Update

November 24, 2018

 

Welcome to the Bollinger Band Letter Update for Saturday the 24th of November.

 

After the initial short-term W bottom in the S&P 500 we discussed, the market made an almost perfect Fibonacci retracement of 61.8% and is now back down and retesting the lows setting up what we believe will be an intermediate-term W bottom, which is confirmed by the 50-day Bollinger Bands Pattern. (I don't trade on Fibonacci levels, but when they come into play they provide additional psychological focus for many players which can be important. For me, they are just another 'logical place' to be watched.)

 

If you are looking for a sector to do some buying, real estate is the best looking sector in our work.

 

There is still no pickup in NYSE 52-week new highs that would confirm the end of the correction.

 

A very interesting blast from the past: Chart 22 in our weekly Market Timing chart pack depicts an old market timing system I have written about many times that has just flashed a pair of rare buy signals, tags of the lower band with 21-day Intraday Intensity positive.

 

Oil is under severe pressure here; do have a look at some of the stocks for bounce plays.

 

Stock markets all over the world are trying to put in bottoms. No confirmation yet, but they are trying.

 

The relative strength of smaller and value stocks is picking up. 

 

Our FAANG Index is trading near a new low. The peak to trough decline is now 35%. We suspect that the recovery time will be long.

 

There are two changes to the ETF portfolios this week, sell IWF and IVW. Place the proceeds in cash as all potential replacements are ranked negative.

 

The Value Line Program is out of the market. With the Value Line Geometric Average at 519.45, the Friday buy stands at 527.47.

 

The ETF Program portfolio holdings:

Style (21): IVV 8, CASH, CASH

International (21): RSX 2, EWL 6, EWZ 1

Sector (27): XLV 5, XLU 1, XLP 2

 

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 your weekly Market Timing Chart Pack can always 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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