February 2, 2019
Welcome to the Bollinger Bands Letter Update for Saturday February 2, 2019.
One of the first market aphorisms that I learned was "The most bullish thing the market can do is get overbought and stay so." and that is exactly what this market is doing. Virtually every chart in our market-timing chart pack is constructive. For example, the NYSE advance decline line is leading price higher, the RUSSEL 1000 a-d line is already at its old high and the Miekka Summation signal is just a couple of strong days away from giving an intermediate-term all-clear signal for stocks. On the international front China's market has made a double bottom and turned higher while the FTSE has just overcome initial resistance despite the Brexit worries. Our FAANG Index stalled on 15 January, the day after it gapped up, and has been flat since. There is too much attention being paid to these stocks and there are better opportunities elsewhere.
Theme notes: Smaller stocks are lagging. We expect them to play catch up, but for now, larger stocks are the leadership. Growth versus value is pretty much a toss, with value maintaining a slight edge.
We remain very constructive on stocks and feel that you should be as invested as is comfortable for you.
There are no changes to the ETF portfolios this week. (There was an incorrect purchase price of IWP in the ETF Portfolios table, it should be122.15 for a current gain of 4.38%.)
The Value Line Program remains in the market, with the Value Line Geometric at 523.86 the Friday sell stop stands at 511.27.
The ETF Program portfolio holdings:
Style (21): IVV 7, IWD 8, IWP 1
International (21): RSX 4, EWL 6, EWZ 1
Sector (27): XLV 6, XLU 12, PSJ 2
Our allocations are 70% US stocks, 10% international, 10% yield and 10% 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 2019 by Bollinger Capital Management, Inc.