The Mad Hedge Fund Trader“Special “Patience” Issue”

With John Thomasfrom Incline Village, NV

March 18, 2015www.madhedgefundtrader.com

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Honolulu, HawaiiApril 3, 2015

Incline Village, NevadaApril 17, 2015

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Las Vegas, NevadaMay 8, 2015

Chicago, IllinoisApril 30, 2015

Trade Alert PerformanceUp on the Year!

*January MTD +0.53% Final*February MTD +7.73% Final*March MTD -0.45%

*2015 Year to Date +7.81%compared to +1.5% for the Dow Average

*Trailing 1 year return +30.8%

*First 220 weeks of Trading +160.6%!

*11 out of 13 consecutive profitable Trade Alerts, 6.43% from new All time high!

Portfolio ReviewNo Positions!-100% Cash

(FXE), (FXA), (GLD), (USO) at extremely oversold(FXY) extremely overbought(SPY), (QQQ), (IWM) in correction which may or may not end today(TLT) trendless

On the Short list:

buy (IWM), (HEDJ), (DXJ), (YCS)sell (FXE)

Paid Subscriber Trailing 12 Month Return +36.8%

50 Months Since Inception Averaged annualized +37.6%

Strategy Outlook-Waiting for the Fed

*Multiple reallocations are changing the character of global financial markets, could be the new trades for the rest of 2015

*out of US and into Europe *out of US large caps into US small caps *Out of bonds into stocks *Out of all foreign currencies into dollar

*Oil reaching a selling crescendo on storage crisis, could hit $30 handle by Friday

*Euro plunge now hugely overextended

*Gold threatening new lows

*Coming spring thaw brings new lows for ags

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

Technical Set Up of the Week- Waiting for Wednesday Fed Meet

Buy

Individual US biotech namesEurope (HEDJ) and Japan (DXJ) on dips

Sell Short

Run oil (USO) short with trailing stop

Avoid

US stocks, stuck in narrow rangeEuro (FXE) on upside breakoutBond (TLT) until new trend confirmedGold (GLD) on rate rise prospects

The Global Economy-Another Batch of Bad Data

*Welcome to the mini growth recession

*ECB raises 2016 GDP forecast from 1.5% to 1.9%, thanks to QE launch on March 9, rising exports to the US and China

*West coast port strike, weak euro, and bad weather blamed for US GDP revision from 2.6% to 2.2%, February retail sales off -0.6%, Producer Price Index down -0.5%, Feb Industrial Production drops from +0.3% to +0.1%

*China cuts 2015 GDP growth forecast from 7.5% to 7%

*Weaker yen boosting Japanese economy, has become a hedge fund favorite

Weekly Jobless Claims – Another Run at the Lows-36,000 to 289,000

Bonds-It’s All About “Patience”

*If “patience” comes out of Fed statement, bonds crater

*If “patience” stays in Fed statement, bonds rally strong, and you want to sell into this rally

*Weak US data giving bonds support here

*The big reallocation out of bonds into stocks has started, major unloads by China and Russia

*Fed not to raise interest rates until 2016, reinforced by oil and bond yield crashes, but bond market is starting to discount it now

*Deflation is here to stay

Ten Year Treasuries (TLT) 2.04%Is This the Top?

Ten Year Treasuries ($TNX) 2.04%Where is the Trend?

30 Year Treasury Yield ($TYX)-Yield 2.61%

Junk Bonds (HYG) 5.48% YieldThe New Lead Contract

2X Short Treasuries (TBT)

Investment Grade Corporate Bonds (LQD)3.35% Yield

Emerging Market Debt (ELD) 5.77% Yield - New Lows!

Municipal Bonds (MUB)-2.70% yield, Mix of AAA, AA, and A rated bonds

Stocks-The Stealth Bear Market*1/3 of Dow stocks now at 52 week low

*If “Patience” stays in, stocks rally to new highs, if not, we could get a 10% correction

*Massive shift out of the US into Europe going on, $33.6 billion out of US equity mutual funds in 2015, $35.6 billion into Euro funds

*Assets in (HEDJ) International ETF up 10X in 12 months to $12 billion

*Money that is staying in the US is moving out of big caps into small caps to dodge the Euro hit on corporate earnings

*Remaining US focus is on biotech and health care

*Japan is another big reallocation targetNikkei hits multiyear highs

*Volatility recovers $17 handle

S&P 500-Breakout from Another Sideways consolidationtook profits on the long 3/$200-$204 vertical bull call spread

Dow Average-Head and Shoulders Topping Risk

NASDAQ (QQQ)-

Europe Hedged Equity (HEDJ)-New 7 Year Highsassets up 10X in a year

(VIX)- Coming Back to Life

Russell 2000 (IWM)-Going from Strength to Strength

Technology Sector SPDR (XLK), (ROM)

Industrials Sector SPDR (XLI)

Health Care Sector SPDR (XLV), (RXL)trend is still up

Financial Select SPDR (XLF)-Rally on Bond Bust Fades

Consumer Discretionary SPDR (XLY)

Apple (AAPL) –Apple TV network boost

Cisco Systems (CSCO)-took profits on our long 3/$27-$29 vertical bull call spread

China bans purchases of foreign technology

China (FXI)-Shanghai Index hits 7 year high

Japan (DXJ)-Hedged Japan Equity

Japan Nikkei Average

Japanese Yen

Sony (SNE)

Emerging Markets (EFA)-

India (EPI) –New 4 Year High

Foreign Currencies-Waiting for the Fed

*Euro QE has begun, buy the rumor, sell the news

*Immense profits have built up in Euro, short positions are the largest in history

*If “patience” stays in, watch out for round of Euro and Yen profit taking

* if “patience” comes out, dollar soars to new highs on rate rise prospects

*Watch for rotation out of euro shorts andinto yen shorts so yen can play catch up

*Aussie (FXA) can’t catch a break, withweak oil dragging all of itscommodities down

Euro ($XEU), (FXE), (EUO)took profits on long the 4/$112-$115 vertical bear put spread

$105 Target hit, next is $85 after a rest of weeks to months

Long Dollar Index (UUP)-Short term overshoot

British Pound (FXB)-

Japanese Yen (FXY)-

Short Japanese Yen ETF (YCS)

Australian Dollar (FXA) –No Friends

Chinese Yuan- (CYB)

Emerging Market Currencies (CEW)Dragged down by commodities collapse

Energy-New 7 Year LowsStorage crisis now in play

*New US fracking supplies still coming on stream, will add 500,000 b/d over next three months

*The world is rapidly running out of storage, prompting a global capping surge

*US rig count falling off a cliff, 1,600 to 1,000 now, to 500

*Inventories rising at tremendous rate, up another 9.6 million barrels this week

*Long term investors willing to look througha potential $30 handle and are buying stocks now

*Iran peace deal is the wild card, monthend deal puts another 1.5 million barrelsa day on the market, taking pricesto $20

Oil-Yikes!$30 here we come!

United States Oil Fund (USO)

Energy Select Sector SPDR (XLE)

MLP’s (LINE)-Buy on the next Melt Down

Exxon (XOM)-Warren Buffet unloads holding

Occidental Petroleum (OXY)

Conoco Phillips (COP)

Natural Gas (UNG)-

Copper-

Freeport McMoRan (FCX)-New Lows

Precious Metals-A Bear Market Rally

*Gold Down 10 days in a row for the first time in 40 years

*It’s entirely a strong dollar story

*If “Patience” stays in you might get a $50 gold rally

*(GDX) worst performing sector of stock market in March, down -15%

*(GLD) is breaking down, wait for new range to establish and then trade that

*If “patience” comes out,gold craters on interest rate fears

Gold-STOP LOSS on long 3/$107-$112 bull call spread

Barrick Gold (ABX)-

Market Vectors Gold Miners ETF- (GDX)

Silver (SLV)-

Silver Miners (SIL)

Agriculture-More Bad News

•*Coming spring thaw pushing prices to new lows, disappearance of winter kill

*DBA hits new lows! Yikes!

*US grain now the world’s most expensive, thanks to strong dollar, last Egypt buy went to Russia and the Ukraine, not us, thanks to cheap ruble

*2015 will be another record crop without extreme weather

*Pass for now, bigger fish to fry elsewhere

•

(CORN) –

(SOYB)-

Ag Commodities ETF (DBA)-More New Lows!

Real Estate-A Dramatic Slowdown

*Cold weather slams home sales more

*New housing starts down a stunning -17% MOM from 700,000 to 593,000, -3% YOY, northeast took biggest hit, -56%

*New permits down big, Builders Sentiment plunging

*10% of all US homes, or 5.4 million units, still underwater on mortgages, preventing trade ups and creating a drag on the entire market

*Market ran ahead of affordability 2012-2014, waiting for incomes to catch up

*Huge student debt keeping entry levelbuyers out of market

December S&P/Case–Shiller Home Price Index+14% YOY down to +4.5%, Still Slowing

US Home Construction Index (ITB)

Trade SheetSo What Do We Do About All This?

*Stocks- buy the dips, with technology and health care leading *Bonds- sell rallies*Commodities-stand aside, buy the next oil down leg*Currencies- sell Euro, Yen*Precious Metals –stand aside, wait for new low*Volatility-middle of range, stand aside*The Ags –warm weather brings new lows*Real estate- stand aside, the dead cat bounce is done

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Good Luck and Good Trading!