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!