the mad hedge fund trader “special ebola issue”

The Mad Hedge Fund Trader“Special Ebola Issue”

With John Thomasfrom San Francisco, CA

October 8, 2014www.madhedgefundtrader.com

Trade Alert PerformanceStill Another New All Time High!

*January Final +3.05%, *July Final +4.18% *February Final +6.41%, *August Final 5.86%*March Final -2.52% *September Final 5.01%*April Final +3.32% *October MTD 5.18%*May Final +4.61%*June Final +4.24%

2014 YTD +39.7%, versus 1% for the Dow,an outperformance of 39%, 10% since last webinar!

*First 187 weeks of Trading +162%!

Paid Subscriber Trailing 12 Month Return +65.4%

46 Months Since Inception Averaged annualized +41.9%

Portfolio Review-Pedal to the Metal!Making a Fortune on a Neutral BookPositioned for a big sideways move

current capital at risk

Risk On

(TSLA) 11/$200-$220 call spread 10.00%(TBT) short Treasury ETF 10.00%(SPY) 11/$185-$190 call spread 10.00%(BAC 11/$15-$16 call spread 10.00%

Risk Off

(IWM) 11/$117-$120 put spread -10.00%(IWM) 11/$116-$119 put spread -10.00%(SPY) 10/$202-$205 put spread -20.00%(FXE) 11/$127-$129 put spread -10.00%

total net position -10.00%

Strategy Outlook-Risk Back On

*Blockbuster September nonfarm payroll of 248,000, huge back month revisions, headline unemployment 6.1% down to 5.9%, an 8 year low

*Every asset class in the world is anticipating higher interest rates, except the bond market

*Commodities, oil, gold, silver, base metals, food, and foreign currencies in free fall

*Dollar hits multiyear high against everything

*Is this the Midterm election correction,but we just can’t see it? Buy the post electioncrash if the Democrats hold the senate(watch Kansas).

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

Technical Set Up of the week-Watch European financials for the lead

Buy

*Gold at bottom of range for buy

*Bonds only have 2-3 points to go

Sell Short

*If (IWM) doesn’t hold here drops another 10%

Avoid * Everything, could take 2 more weeks for marketsto Sort themselves out

The Global Economy- The US is an Island of Strength*Blockbuster September nonfarm payroll of 248,000, huge back month revisions, headline unemployment 6.1% down to 5.9%, an 8 year low

*US August JOLTS report show most new job offerings since 2001, labor tightening approaching

*US August Factory orders -10.8%, biggest drop in 10 years

*Plunging gasoline prices under $3 amount to a huge tax cut for all

*European and Japanese economies grinding to a halt,German August industrial production down 4% MOM

*Will force Germany to be more open tomonetary easing

*IMF cuts global growth forecast, but boostsUS from 3.3% in 2014 to 3.8% in 2015

Weekly Jobless Claims - The trend is your Friend-8,000 to 287,000, new 8 year lows!

Bonds-

*Global bond rates still at rock bottom levels, last time US unemployment was at 5.9%, 10 year Treasuries were at 4%, now at 2.40%

*This is the final month of the Fed’s tapers quantitative easing, but interest rates rises not until late 2015 0r 2016

*ECB QE executed in private bond market, not public, pushing prices artificially high

*Switch out of bonds into stocks about to become major factor

*Treasuries make back almost the entire September correct in two days, hit 2.39% for the ten year, another short selling window is opening

*Watch junk bonds (JNK) as the new canary in the coal mine for global risk taking

*Was the September bond selloff all aboutPIMCO’s Bill Gross?

Ten Year Treasuries (TLT) 2.34%

30 Year Treasury Yield ($TYX)-Yield 3.05%

Junk Bonds (HYG) 5.81% YieldThe New Lead Contract

2X Short Treasuries (TBT)long 10% position-Flirting with being early

Investment Grade Corporate Bonds (LQD)3.54% Yield

Emerging Market Debt (ELD) 3.56% Yield

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

MLP’s (LINE) 10.10% Yield-Oil drag boosting yield

Stocks-The Bull That Can’t Be Killed!

*Solid bounce off $1,925 and September nonfarm rally brings the bulls back in

*Alibaba correction almost done, fears of strong dollar hurting US earnings is being overstated, most big companies have hedged out risks

*Watch for the sector rotation, out of energy and technology and into financials and consumer discretionary

*Yearend rally coming, but not yet, expect a sideways wedge for 2-4 weeks

*(SPY) could add 10% by yearend from the August low, regardless of geopolitics

*Volatility peaking here

S&P 500 (SPY) Targeting 200 day moving averageLong 11/$185-$190 vertical bull call spread

Short 2X 10/$202-$205 vertical bear put spread

Dow Average-Targeting 200 day moving average

NASDAQ (QQQ)-Still an Uptrend

Europe Hedged Equity (HEDJ)-200 day broken!

(VIX)-It’s Alive!

Russell 2000 (IWM)-Channeling Too

Technology Sector SPDR (XLK), (ROM)Rolling Over

Industrials Sector SPDR (XLI)

Health Care Sector SPDR (XLV), (RXL)

Financial Select SPDR (XLF)Hit by Strong Bond Market

Consumer Discretionary SPDR (XLY)

Apple (AAPL) –iPhone 6 Indigestion

Tesla (TSLA) –New Model Launch TomorrowPanasonic to invest tens of billions of dollars in giga factories

long the 11/$200-$220 vertical bull call spread

GT Advanced Technologies (GTAT)No Sapphire for iPhone 6 Means Chapter 11!

Google (GOOGL)

China-The Bull market is Here

Japan (DXJ)-Weak on poor GDP figuresYen Dead Cat Bounce

Emerging Markets (EEM)-200 day here too

India (EPI) – Still Grinding Up on EEM Strength

Foreign Currencies-King Dollar Reigns Supreme!

*Prospect of rising US rates and falling ones around the world sends the greenback to multiyear highs

*Failure of ECB to announce new moves pushes Euro into free fall.

*VAT tax rise hangover still hurting Japanese economy, yen break Y110, targeting Y115

*Commodity collapse killing the Aussie

*Virtually all currencies now extremely over expended, risk of a snap back rally risingoff the back of Treasury complaints aboutcompetitive devaluations

Euro (FXE)-The Freefall is OnLong the 11/$127-$129 vertical bear put spread

Long Dollar Index (UUP)Four Year High, But just the beginning of the bull market

British Pound (FXB)

Japanese Yen (FXY)-

Short Japanese Yen ETF (YCS)

Australian Dollar (FXA) –

Chinese Yuan (CYB)-The bull market has resumed

Emerging Market Currencies (CEW)

Energy-Collapse!

*Technical breakdown of the charts in play, Targeting $70/barrel, oil major stocks already discounting $80/barrel, is marginal overseas cost of production

*Contango weighing heavily on prices, Brent premium almost disappears

*Saudi Arabia said it would cut production, but cut prices instead, deep discounting for the Chinese

*Gasoline prices now below $3 inmuch of the country

*Russia facing budget crisis,boosting exports to offsetfalling prices

*Kurds have 15 tankers trying tosell oil on the black market

*Natural gas sees one of the largest weekly injections in history at 112 Bcf

OilBack to Multi Year $77.50-$112.50 Range

United States Oil Fund (USO)

Natural Gas (UNG)-

Copper-Bottom of the Range

Freeport McMoRan (FCX)

Precious Metals-Breakdown!

*Break of $1,200 targets $1,000

*5 year renewal of Central Bank Selling Agreement, with no limits spreads panic

*Seasonally positive Indian wedding and Chinese New Year having absolutely no impact

*Waiting for India’s PM Modi tolife import taxes on gold

*No flight to safety here!

Gold-Plunging Interest Rates Crushing Prices

Barrack Gold (ABX)

Market Vectors Gold Miners ETF- (GDX)

Silver (SLV) –Breakdown!

Silver Miners (SIL)

Agriculture

•*Weather still perfect, prices falling, Corn targeting 15 billion bushels, the largest in history

•*Soybeans take a hit on Chinese import ban on GMO imports

*Falling crop prices are pulling farm values down, could feed into in rural banking problems if continues

*Rail cars diverted from grain to oil, causing shipping problems in the Midwest and Canada

*Strong dollar making US grain exportsincreasingly uncompetitive in the international market

*Stand aside

•

(CORN) - New Lows!

(SOYB)-Free Fall!

DB Commodities Index ETF (DBC)

Real Estate-An Autumn Revival?

*Price gains are slowing dramatically nationally.

*July S&P 500 Case Shiller 20 city Index now up only 6.7% YOY,rate of gains falling quickly

*Only San Francisco, Miami, and Las Vegas are still showing double digit YOY gains

May S&P/Case–Shiller Home Price Index+14% YOY down to +6.7%

Trade Sheetkeep positions small, better not to trade at all

than pursue marginal trades

*Stocks- buy the dips, but keep size small, with financials leading*Bonds- sell rallies across all fixed income, end is near*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 –stand aside*Real estate- stand aside

To buy strategy luncheon tickets Please go to:

www.madhedgefundtrader.com

Next Strategy Webinar 12:00 Wednesday, October 22, 2014 Live from San Francisco, California

Good Luck and Good Trading!