December 1, 2018
Welcome to the Bollinger Bands Letter Update for Saturday the 1st of December.
Larger stocks led this week's comeback with growth stocks picking up the most interest. Our FAANG Index bounced off its low, however I am still expecting a long recovery time for these stocks. For the market as a whole we have completed a second W Bottom in Bollinger Bands terms and both are quite well confirmed. We strongly feel that the correction is over and that we are in a recovery period. Confirming that opinion was a Breadth Thrust reversal completed last week. We now expect to see better prices for stocks well into next year. Those of you that have followed our work on Three Pushes to a High in Bollinger Band terms, will recognize that the two Ws with a low in common that we have seen in the wake of this correction constitute a Three Pushes to a Low reversal pattern. The fly in the ointment for the market is the still strong number of new lows, which I do not think will contract until after tax selling season is over; think opportunities for The Bounce.
Given all that is going on in the market and the opportunities developing I plan to write the December Bollinger Bands Letter this week and publish it next Saturday.
There are two changes to the ETF portfolio, both are moves from cash to large-cap value; buy IWD and IVE. I suspect that we will roll out of those into growth in the near future. You are free to anticipate that by buying IWF and IVW. More on that in next week’s letter.
The Value Line Program reentered the market Friday. With the Value Line Geometric Average at 533.31, the Friday sell stop stands at 520.61.
The ETF Program portfolio holdings:
Style (21): IVV 4, IWD 1, IVE 2
International (21): RSX 5, EWL 3, EWZ 1
Sector (27): XLV 1, XLU 3, 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:
Until next time, I wish you well.
John Bollinger, CFA, CMT
Copyright 2018 by Bollinger Capital Management, Inc.