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Daily Trend and Trade Review

March 21, 2017

Trader Talk

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

I have written for a couple of weeks now the stock indexes were flirting with a big melt-down day of the 2%+ loss variety, and today we saw such a dive.

The degree of losses was related to breaking of the first of three uptrend lines shown in the chart below.

The sell-off should be viewed as a swift corrective zag, prior to yet another modest zig to new highs, as a prelude to yet another corrective zag, with each move up and down expected to be of greater size and magnitude than the last.

The red dotted line shows the expected pattern, with the red arrows what happens later this year once the staggered melt-up completes the bull market off the 2009 lows.

Some financial TV pundits are blaming the losses on the fate of President Trumpís healthcare reform bill, which faces a key vote in the House on Thursday. If the two are related, then the expected dotted red line points to a very turbulent time for the Trump administration, though points to good news on Thursday, as stocks should be in position to bottom around that time as we likely rocket to new highs by month end.

For now, holding longs, while hedged, remains the optimal allocation, though get ready for some rapid fire shorter term trades on the hedging side of the portfolio.

Current positioning for the Index/VIX/Hedge Portfolio is 94% QLD, 5% TZA, 1% TVIX. This portfolio is up over 21% in 2017.

The 401K portfolio is in a stock index mutual fund, with QQQ used for tracking purposes. This portfolio is up over 11% in 2017.

Next update after the markets close Wednesday.

Kevin Wilde Kevin Wilde
Chief Trading Strategist

Portfolio Update Archive

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