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Daily Trend and Trade Review

April 25, 2017

Trader Talk

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

We expected a stock market low in late April, followed by a run to new highs going into May, as laid out with the red dotted projection line the chart below.

It appears the expected sell-off was less severe than expected, helping the rally begin a week or so earlier than expected.

Since we are near fully invested long via QLD and QQQ, such action is fine with us, especially since such NASDAQ derivatives are the clear leaders during this blow off bull phase.

Note the green trend trading timing line at the bottom of the chart is closing in on a cross of the white high risk exit line, which will be cue to take profits on our QQQ and QLD positions.

We then would look to reenter those positions on a pullback for stocks that drives the trend trading green line into the low risk enter zone.

During new bull markets which we do NOT believe we are in there are usually three such home run wins that lead to three killer buy the dip opportunities without seeing any change in trend.

More likely, we get to enjoy one such home run win this one followed by a sell-off to begin a new downtrend, or two such home run wins, ahead of a fall crash.

The red dotted line leading to the solid red arrow crash line shows this latter two home run win scenario, which is the most likely outcome.

Either way, new bull or old bull soon to make a bear turn, our indicators have these possibilities fully covered.

For now, holding longs while hedged with a small amount of TZA and TVIX remains the optimal allocation, where I expect to adjust these positions on the next big move stocks make.

Current positioning for the Index/VIX/Hedge Portfolio is 94% QLD, 5% TZA, 1% TVIX. This portfolio is up over 25% in 2017.

The 401K portfolio is in a stock index mutual fund, with QQQ used for tracking purposes. This portfolio is up over 14% in 2017.

Next update after the markets close Wednesday.

Kevin Wilde Kevin Wilde
Chief Trading Strategist

Portfolio Update Archive

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