Today SPY, the ETF based on the S&P 500, broke through into new all-time high ground. Of course the bears are pointing wildly to the divergences, of which there are many—as there must be. In the process of the market moving into new all-time high territory, inevitably there will be leaders and laggards. We are mostly interested in the tradables and note that IJR, the massive small stock ETF, and MDY, the massive mid-cap ETF, are each just a few ticks away from new highs. We focus on the actual determinants of portfolio performance, the securities people buy and sell, which we call tradables. We think that focus adds quite a bit of value to our analytical process.
We remain cautiously bullish, recommending small- and mid-cap ETFs for those that need additional portfolio exposure.
John Bollinger, Capital Growth Letter, www.bollingerbands.com, 310-798- 8855, June 6, 2016
