May 4, 2019
Welcome to the Bollinger Bands Letter Update for Saturday May 4, 2019.
I notice that smaller stocks have been developing a lot of relative strength over the past two weeks. If that is sustained, it could be a major contributing factor to another leg up for this market. In the meanwhile growth versus value remains a push. New highs in the advance decline lines continue to confirm the strength in the broad market, though we would still like to see more new 52-week highs. There is a lot of internal rotation, which is healthy, the result of which is that internally the market is actually a bit oversold. In the background bullish sentiment is nearing extreme levels, which is an important risk factor for the market. Still, our outlook is bullish and we remain constitutive on equities in nearly all markets. Take China for example, the Shanghai Composite has pulled back to its prior breakout level and stabilized there; a nearly perfect reentry buy setup. Need to add some exposure and want some diversification at the same time? How about EEM, the emerging markets ETF, or FXI, the China ETF?
I plan to publish the May Bollinger Bands Letter on the 18th this month.
The Value Line Program remains in the market, with the Value Line Geometric at 552.12. The Friday sell stop stands at 539.2. The sell level for the classic version is 511.22.
There are no changes to the ETF program this week.
The ETF Program portfolio holdings:
Style (21): IVW 2, IWR 8, IWP 3
International (21): EWH 1, EWL 3, EWI 11
Sector (27): PBW 5, IGN 13, SOXX 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.