The Mad Hedge Fund Trader “At Last!’” With John Thomas from San Francisco, CA September 10,...

The Mad Hedge Fund Trader“At Last!’”

With John Thomasfrom San Francisco, CA

September 10, 2014www.madhedgefundtrader.com

Drew the Short Straw

Trade Alert PerformanceStill Another New All Time High!

*January Final +3.05%, *July Final +4.18% *February Final +6.41%, *August MTD 5.86%*March Final -2.52% *September +0.60%*April Final +3.32%*May Final +4.61%*June Final +4.24%

2014 YTD +30.11%, versus 3% for the Dow,an outperformance of 26%

*First 185 weeks of Trading +152.6%!

Portfolio Review- Running Out of Positions!

current capital at risk

Risk On

(TBT) short Treasury bond ETF 10.00%

Risk Off

none

total net position 10.00%

Trailing 12 Month Return +57.6%%

44 Months Since Inception-50 BP Short of All Time High

+152.5%, Averaged annualized +39.8%

Strategy Outlook-Risk is Still On

*Global bonds probably peaked last week on ECB move

*Cease fire in Ukraine is risk positive, but is this a bluff so Putin can turn off Europe’s natural gas this winter?

*Now Alibaba is looming over global capital markets, triggering $20 billion in reallocations

*ECB makes its big move, collapsing Euro andyen and sending dollar to yearly high

*US dollar stronger than it appears

The Jim Parker ViewThe Mad Day Trader-On sale for a $1,500 upgrade

Technical Set Up of the week

Buy *Dollar in any form, yen, Euro

*European bonds

Sell Short – *Stock Market trying to put in short term high

*Every oil rally has failed

Avoid –*Gold, precious metals

The Global Economy-The US is Stronger than it looks

*August nonfarm payroll a disappointment at 142,000, means interest rates lower for longer, unemployment 6.2% down to 6.1%

*US Q2 GDP growth at 4.2% is hotter than hot, may get revised up more!

*Europe fears of Japan deflationary repeat as August inflation falls to 0.3%, French GDP market down from 1% to 0.5%

*Japan fears of European deflation, Q2 GDP -7.2% annualized off of tax increase, New pension head in Japan to shift greater share of $1.3 trillion in assets out of bonds and into stocks, means more QE sooner

*China August services PMI up from 54.2 to 54.4

*US July Factory Orders rise a record 10.5%one huge airliner exports

ISM MfG New 7 Year HighIs What the Stock Market is Seeing

Weekly Jobless Claims-The trend is your Friend+4,000 to 302,000, new 7 year lows!

Bonds-US and Europe Simultaneously Top Out

*Highs for the year were probably put in for for Europe and the US last week, triggered by ECB QE

*One more rally left to test the theory, put in reverse head and shoulders on charts

*Fed tapers quantitative easing to zero in next month, but interest rates rises not until late 2015

*New trade of the year is to Switch out of bonds

*Huge rally in (JNK) disappears

Ten Year Treasuries (TLT) 2.50%failure here is key, proves my top for the year call

30 Year Treasury Yield ($TYX)-Yield 3.23%Inverse Head and Shoulders setting Up?

Junk Bonds (HYG) 5.70% YieldThe New Lead Contract-Wow!

2X Short Treasuries (TBT)long 10% position-keeping for a quick turnaround

volatility is low

Investment Grade Corporate Bonds (LQD)3.49% Yield

Emerging Market Debt (ELD) 3.30% Yield

Municipal Bonds (MUB)-2.88% yield,Mix of AAA, AA, and A rated bonds

MLP’s (LINE) 9.40% Yield-Holding Up Against Falling Oil

Stocks- Best August in 14 Years

*S&P 500 had gone 14 consecutive days without a 0.50% move, longest boring streak since 1995.

*Reallocation from bonds and stocks into cash us underway, stocks will lead the rebound

*Will see a sector shift on next 4% correction, out of Apple and technology and into banks, or out of Apple into other technology

*(SPY) should hit 2,100 by yearend

*Use next volatility visit to $17 ascue to buy

S&P 500

Dow Average

NASDAQ (QQQ)-Still an Uptrend

Europe Hedged Equity (HEDJ)-Weak Euro Helping Stocks

(VIX)-Back to the Bottom

Russell 2000 (IWM)-Wedge Setting Up?

Technology Sector SPDR (XLK), (ROM)Watch Out for an Apple Drag!

Industrials Sector SPDR (XLI)

Health Care Sector SPDR (XLV), (RXL)

Financial Select SPDR (XLF)

Apple (AAPL) – We got the Run to New HighsThe iPhone 6 is Here! Buy the rumor, sell the news!

Google (GOOGL)

Stock of the Week-First Solar (FSLR)

China-The Upside breakout is Here!

Japan (DXJ)-Weak on poor GDP figures

Emerging Markets (EEM)

India (EPI) – Still Grinding Up on EEM Strength

Foreign Currencies- Euro QE is Here at Last!

*Draghi move the big move, with interest rates cuts and QE, more to come, 400-800 billions Euros to start, 5 years behind the US

*Medium term target of $127 hit, next comes $125, $120, and eventually $1.00

*Scotland votes for independence51-49, demolishing the pound

*BOJ announces no new monetary actions, but yen falls anyway

*Dollar hits new high for the year,sucking in more foreign money intoUS financial assets

Euro (FXE)-The Freefall is Ontook profits on the 9/$133-$135 put spread

Long Dollar Index (UUP) – Euro and Yen Collapse Great for Dollar

British Pound (FXB)Demoed by Scottish Poll showing 51-49 in favor of leaving the

UK

Japanese Yen (FXY)-A Breakdown at Last!Launching off a 25 year base

Short Japanese Yen ETF (YCS)

Australian Dollar (FXA) – Flat lining on Neglect

Chinese Yuan (CYB)-Only the Yuan is holding up against Uncle Buck

Emerging Market Currencies (CEW)

Energy-Collapse!

*Collapsing prices are forcing Russia to sell more oil to support weakening economy, accelerating the downturn

*Saudi Arabia fighting back to preserve market share, boosting production

*Flip from Contango to Backwardation is price supportive

*Kurdish direct sales increasing after winning US court cases

*Libyan exports resume, potentially adding 1.5 million barrels/day to global supply

*Russia funding anti—fracking efforts in Europe to protect huge market there, export earnings

*China leases world’s largest tanker tostore 3.2 million barrels long term

Oil- Back to Multi Year$77.50-$112.50 Range

United States Oil Fund (USO)

Natural Gas (UNG)-

Copper-It’s All About the Dollar

Freeport McMoRan (FCX)-

Precious Metals-The Anti Dollar Trade

*Simultaneous acceleration of quantitative easing in both Japan and Europe is very gold negative, Euro interest rate cut another nail in the gold coffin

*Physical gold purchases from China and India falling, even though we are into the Indian wedding season

*Collapsing oil, strong dollar together dragging down gold

Gold-Yuk!

Barrack Gold (ABX)-

Market Vectors Gold Miners ETF- (GDX)

Silver (SLV)-Show Me the Rally

Silver Miners (SIL)-

Agriculture

* USDA crop progress report is one of the best in history

*Perfect weather continues

*Too many farmers still waiting for a rally to sell into

*Soybean “good/average rating is 64%, now at an amazing 74%, same for wheat and corn

*Hopes for an early frost?

*Stand aside

(CORN)-New Lows! Blame This on the Dollar Too!

(SOYB)-Free Fall!

DB Commodities Index ETF (DBC)-Double Yuk!

Real Estate-An Autumn Revival?* Mortgage Interest rates at 18 month lows have failed to spur the market

*End of taper could bring the end of the 30 year fixed rate loan.

*High end house flipping is soaring

*Entry level buyer MIA and may be gone for a decade(student loans, bad associations,other priorities)

*

May S&P/Case–Shiller Home Price Index+9.3% down to +8.1% YOY

(ITB)-US Home Construction Dow Sub indexpositive data is feeding into stocks

Trade Sheet-keep positions small, better not to trade at all

than pursue marginal trades

*Stocks- buy the dips, but keep size small, with tech leading*Bonds- sell rallies across all fixed income, the top is in*Commodities-stand aside*Currencies- sell every Euro rally forever, and the yen too*Precious Metals –stand aside, buy the next bottom*Volatility-stand aside, could be a long summer*The Ags –buy new lows*Real estate- stand aside

To buy strategy luncheon tickets Please Go towww.madhedgefundtrader.com

Next Strategy Webinar 12:00 Wednesday, September 24, 2014, Live from San Francisco, California

Good Luck and Good Trading!