My market health indicators are signalling that some consolidation is likely. All of the core categories are negative with the exception of risk. When this happens it usually signals that investors are taking profits, rebalancing portfolios, and/or rotating between sectors. At this point, I don’t expect a large draw down. It’s more likely that we get some chop (maybe a month or so) before moving to new highs in the S&P 500 Index (SPX). The movement in my core indicators change the portfolio allocations as follows: Volatility Hedged portfolio: 100% long (since 5/7/2018) Long / Cash portfolio: 20% long and 80% cash Long / Short Hedged portfolio: 60% long high beta stocks and 40% short the S&P 500 Index (or use an ETF like SH) As always, use your own risk tolerance to manage your portfolio.

Over the past week, my measures of market quality recovered and are now back above zero. This changes the portfolio allocations as follows: Long / Cash portfolio: Long 60% cash 40% Long / Short Hedged portfolio: Long 80% high beta stocks Short 20% the S&P 500 Index (or use and ETF like SH) Volatility Hedged portfolio: 100% long (since 5/7/2018)

Over the past week my measures of market quality have gone positive. This changes the portfolio allocations as follows: Long / Cash portfolio: 80% long and 20% cash Long / Short Hedged portfolio: 90% long high beta stocks and 10% short the S&P 500 Index (or use an ETF like SH) Volatility Hedged portfolio: 100% long (Since 5/7/2018)

All of my market health indicators are strengthening. Most notably my measures of risk and strength have moved from negative to positive. This changes the portfolio allocations as follows: Long / Cash portfolio: 60% long and 40% cash Long / Short porfolio: 80% long high beta stocks and 20% short the S&P 500 Index (or use an ETF like SH) Volatility Hedged portfolio: 100% long (since 5/7/2018)