A multi-block, momentum-driven hedging strategy that tilts toward volatility hedges (UVXY/VIX ETFs) when short-term momentum signals are extreme, otherwise shifts into defensive assets (gold, Treasuries, dollar) and diversified hedges. Built to balance long-volatility exposure with anti-beta and defensive overlays while using limited rebalancing.

Plain-language description of how it operates: - The strategy is built in modules or blocks. Each block decides how much cash to allocate to a set of assets based on momentum signals. The signals are mostly short-term RSI checks on certain market proxies (often leveraged stock proxies) and occasionally other checks like max drawdown or a moving-average comparison. - Core logic in simple terms: - Watch for extreme short-term momentum in some stock proxies (e.g., TQQQ, QQQ, SPY, SPXL). If the signal is very strong (RSI above a high threshold), tilt toward volatility hedges (UVXY, VIXY, VIXM) to protect against a potential sharp reversal. - If the momentum signal is not extreme, tilt toward defensive or hedging assets such as gold (GLD), short-to-intermediate Treasuries (SHY, IEF), or the US dollar (UUP) to reduce equity beta and preserve capital. - Some branches also include anti-beta ideas (BTAL) and diversified hedging baskets that combine several defensive assets (GLD, BTAL, IEF, VIXY, UUP, SHY, etc.). The intent is to reduce correlation with the broad market during stress while still keeping some exposure to growth assets when conditions are favorable. - Rebalancing and allocation - The structure uses a “cash-equal” approach within certain blocks, meaning the money allocated to sub-choices within a block is kept roughly equal among the options that are active. The top-level overall weight shown (50/100) suggests the Dragon 4.7 long-volatility bucket is a major, but not exclusive, allocation in the portfolio, with the rest distributed among the hedges/defensive blocks. - Rebalancing is set to none in the configuration, with a very narrow corridor for rebalancing (rebalance corridor width 0.1). In practical terms, the model does not whimsically rebalance every day; it shifts only when its internal rules deem a meaningful change. - What this means for an investor: - If markets become choppy or downturns loom, expect a tilt toward volatility hedges (UVXY/VIX ETFs) and defensive assets (GLD, SHY, IEF, UUP). - In calmer or rising markets without extreme momentum signals, the strategy may reduce volatility exposure and lean more on cash-like hedges and defensive diversification rather than levered volatility bets. - The design tries to guard against large drawdowns (via max-drawdown checks) and to avoid chasing markets when momentum is overheated, but it also carries the typical risks of volatility-focused products (volatility ETFs can be costly, and timing signals may whipsaw in regime changes). - Major risks and caveats: - The signal framework is highly dependent on RSI thresholds and tail decisions. Small changes in thresholds or data can flip allocations, creating potential whipsaws in sideways markets. - Volatility ETFs (UVXY, VIXY, VIXM) can underperform for extended periods and experience rapid decay during flat markets, so the strategy assumes sufficient regime moves to justify hedges. - Complexity: with multiple nested decision trees and a large basket of assets, maintenance and interpretation require careful review; backtests may look favorable if the historical regime matches the signal logic, but real-time performance can vary. - In short: it’s a multi-layered, rules-based program that tries to guard a core equity exposure with proactive momentum-driven volatility hedges and a diverse set of defensive assets, aiming to capture upside from volatility spikes while limiting drawdowns during stress.

Out-of-sample: 24.61% annualized return vs SPY 20.41%; max drawdown 5.43% vs 18.76%; Sharpe 2.18 vs 1.14; beta 0.11; Calmar 4.53—delivering stronger upside with far tighter downside protection than the S&P 500.