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Daily Trend and Trade Review

February 13, 2017

Trader Talk

The trend momentum power rating remains a strong 70% uptrend.

While the NASDAQ may be in the process of pulling a 1999/2000 royal melt-up, the likely path forward is one of sideways churn that first ends well for the bulls, then ends in a hard swoon to begin the new bear.

For now, enjoying the bull run is the way to go, though hedging with a little TZA and TVIX remains the optimal allocation.

In the big picture, the white NASDAQ volume line (top part of chart) remains on the cusp of triggering a green arrow bull confirming cross of its prior breakout level, though the blue line representing stocks trading above their 50 day average (bottom part of chart) remains below the yellow line representing stock trading above their 200 day averages, which usually signals a correction is either underway, or fast approaching.

While one does not want to trade against the majority opinion of those leadership canaries and all the others remain in solid bull confirming mode - a swift correction can land at any time, with this one long overdue.

We expect to remove our hedges on this expected corrective dip that refreshes slated to begin in earnest in the non-too-distant future.

Current positioning for the Index/VIX/Hedge Portfolio is 94% QLD, 5% TZA, 1% TVIX.

The 401K portfolio is in a stock index mutual fund, with QQQ used for tracking purposes.

Kevin Wilde Kevin Wilde
Chief Trading Strategist

Portfolio Update Archive

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