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Daily Trend and Trade Review

March 22, 2017

Trader Talk

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

The expected pattern going forward is likely to be a wild ride of zigs and zags, where each sell-off is met with a rally to modest new highs, as a prelude to yet another corrective zag to lower lows for the correction, with each move up and down of greater size and magnitude than the last.

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

Since there seems to be a link with President Trumpís agenda and stock market action, it appears we are likely in for a wild ride on that side of things too, starting with the House vote Thursday on repeal and replace of Obama-care.

I have no clue what will happen on that front, and recent stock market action says a similar thing, where any pessimistic outcome is likely soon matched with an optimistic reversal, which is followed just as quickly with a pessimistic knock-down.

Whether 2017 ends with a massive blow-off to new highs, or suffer a 1987-style reversal, likely depends on how all of this political back and forth plays out. For now, political war and indecision seems to be our reality over the spring and summer.

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 Thursday.

Kevin Wilde Kevin Wilde
Chief Trading Strategist

Portfolio Update Archive

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