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Weekly Trend and Trade Review

April 21, 2017

Trader Talk

The trend momentum remains a strong 70% uptrend.

The first chart below shows the usual trading pattern when in high risk blow off bull years which is the phase of the bull/bear cycle I believe we are in - overlaid over some past blow off bull years, with the white lines to the left of the chart the NASDAQ for 2017.

The starting rally usually hits the 5%+ level on the year before sliding in a correction.

The middle rally usually hits the 15%+ level on the year before sliding in a correction.

The final rally usually hits the 25%+ on the year before sliding in a BIG correction to start the next Great Bear.

We are currently near the 10% level for this year for the NASDAQ, with the prime question remaining whether the run towards the 15% level on the year in the middle rally position has begun, versus we still have to endure the first correction prior such a rebound run to new highs.

The dotted red line in the next chart remains the most likely projected path going forward, as a series of ever-increasing zigs and zags land over the next few months, where each dip leads to higher prices, and every move higher is followed by a larger corrective swoon.

The red arrow is the expected fate once this staggered melt-up bull topping process completes, and the next Great Bear begins.

So on deck next, going into May, we are looking at a blast off to new highs for the NASDAQ, though we may have to suffer a painful dive week in the red prior to bulls enjoying their spring rally to new highs.

For now, holding longs, while hedged, remains the optimal allocation.

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

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

Performance-wise, the 401K portfolio rose 1.66% on the week, and is currently up 12.38% in 2017.

The Index/Hedge/VIX Trader portfolio rose 2.77% this week, and is currently up 22.24% in 2017.

Next update after the markets close Monday.

Have a great weekend!

Kevin Wilde Kevin Wilde
Chief Trading Strategist

Portfolio Update Archive

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