April 20, 2019
Welcome to the Bollinger Bands Letter Update for Saturday April 20, 2019.
There are starting to be some worries for the market of the sort that suggest the possibility of a correction. One is the low value of the VIX, which while not damning by itself, suggests caution when coupled with the low levels of cash in the Rydex funds. (Thanks to Jack Cahn for pointing that out.) While I am still intermediate-term bullish, I'd say that the odds of a correction are increasing. When/if we do get a correction I would view it an as opportunity.
Our FAANG Index has been flat with a slight upside tilt since January. Smaller stocks are continuing to lag while growth versus value has a very slight tilt towards value. Emerging and International markets continue to do well and remain attractive to our eye.
Keep an eye on the biotech ETF IBB; a 15% pullback and broken support could be a setup for a Wyckoff Spring. Watch out for troubles in health care epitomized by MRK. Energy stocks are still lagging and the leaders like CVX are coming under pressure; not a happy sector. Focus on what is working, semis, tech, telecomms, consumer discretionary...
The Value Line Program remains in the market. With the Value Line Geometric at 547.79 the Friday sell stop stands at 537.84. The stop for the classic version of the VLP is 509.95.
There is one change to the ETF program this week, sell software, PSJ and buy semiconductors, SOXX.
The ETF Program portfolio holdings:
Style (21): IVW 3, IWR 9, IWP 2
International (21): EWH 2, EWL 7, EWI 10
Sector (27): PBW 8, IGN 2, SOXX 1
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.