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The Mad Hedge Fund Trader “Waiting for Taper, Or Not ”

The Mad Hedge Fund Trader “Waiting for Taper, Or Not ”

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The Mad Hedge Fund Trader “Waiting for Taper, Or Not ”

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  1. The Mad Hedge Fund Trader“Waiting for Taper, Or Not ” With John ThomasSan Francisco December 4, 2013www.madhedgefundtrader.com

  2. Trade Alert PerformanceThree Year Anniversary! *2013 YTD +56.8%, compared to 21%for the Dow, beating it by 36%*November +11.58%*First 156 weeks of Trading +111.9%*Versus +30% for the Dow AverageA 82% outperformance of the index 75 out of 90 closed trades profitable in 201383% Success Rate in 2013

  3. Portfolio Review-Waiting to Buy the Next Dipwatch out for over trading and over confidence! Trying to double positions in bold Expiration P&L+63.77% YTD

  4. Performance Year to Date +56.8%!!

  5. 36 Months Since Inception+111.9%, Averaged annualized +37.3%

  6. Strategy Outlook-Buy the Dips *Bull market in risk assets continues well into 2014*Bonds have topped, entetering 20 year slow motionbear market*Energy independence creates strong dollar*Free fall in yen continues*Don’t catch the falling knife in gold,the world wants paper assets*Emerging markets will outperform in 2014 off the back of China recovery*Commodities recover as well

  7. The Jim Parker ViewThe Mad Day Trader-On sale for a $1,000 upgradeSummer market still prevails Technical Set Up of the week *Buy If stocks (SPY) hold on Friday, buy themtook profits on Apple (AAPL),get back in low $540’sdon’t touch gold (GLD)*Sell ShortRunning shorts in bonds (TLT), (TBT)Yen short getting long in toothTried to sell oil, but missed

  8. The Global Economy *Global synchronized recovery still the play for 2014, the US, Europe, China, and Japan all grow together for the first time since 2007*Looking like a 3%-4% year for the US*Buy multinationals everywhere*Middle East disruptions will die down, bad for oil, good for stocks and you*Japan $181 billion stimulus packageto offset April 1 tax hike, on top ofexisting $196 billion plan, is $1.13 trillionUS equivalent

  9. Weekly Jobless Claims-10,000 drop to 316,000,

  10. October Nonfarm Payrolldead on the 12 month moving average

  11. Bonds-The Fat Lady is Singing *$147 billion in bond mutual fund redemptions since June*Tapper will overhang the market for all of 2014*Only support is inflation figures that are continuing to fall*Bonds could take a big hit when “Great Reallocation” hits in January*Most analysts targeting 3.5% yield on ten year Treasury for 2014, up from 2.70%,could spike to 4%*Sell every rally

  12. Ten Year Treasuries (TLT) long the 1/$107-$110 put spread-tried to double but missed

  13. 10 Year Treasury Yield ($TNX)

  14. Junk Bonds (HYG)

  15. 2X Short Treasuries (TBT)-The next leg up has started

  16. Investment Grade Corporate Bonds (LQD)

  17. Emerging Market Debt (ELD) 4.72% Yield

  18. Municipal Bonds (MUB)-2.92% yield,Mix of AAA, AA, and A rated bonds

  19. MLP’s (LINE) 11.2% Yield

  20. Stocks – The Bull Market Continues *If Fed doesn’t taper at December 11-12 meeting, then it’s off to the races and new highs, sideways correction until then*By the way, no chance of Fed taper in December, waiting for Yellen*Retail mutual fund flows flip from 2012 redemptions of $116 billion to 2013 inflows on $138 billion*Japan (DXJ) the big performer in 2013, up 39%, carries on into 2014*Leadership in banks, technology, health care, and industrials

  21. S&P 500 (SPX)-Another sideways consolidation has begunlong the 1/$173-$176 call spread, double on a 3 point dip

  22. Dow Average

  23. NASDAQ (QQQ)

  24. (VIX)-Back to the Bottom

  25. Russell 2000 (IWM)-Led the upturn, Now a double top?

  26. Apple (AAPL)-Break to new yearly highs imminentlong the 1/$490-$520 call spread

  27. Technology Sector SPDR (XLK), (ROM)

  28. Industrials Sector SPDR (XLI), (UXItook profits on the (XLI) 12/$45-$48 call spread

  29. Cyclicals Sector SPDR (XLY), (UCC)

  30. Health Care Sector SPDR (XLV), (RXL)

  31. Financial Select SPDR (XLF)long the 1/$19-$21 call spread

  32. Citigrouptook profits on the 12/$45-47 call spread

  33. Shanghai-New Policy Statement is revolutionary

  34. (DXJ)-Upside breakout on more aggressive monetary easing

  35. Emerging Markets (EEM)Trapped by the commodity complex, and rising rates

  36. Dollar-Yen is the Big Story *Successful breakdown targets ¥125 in the cash, $75 in the (FXY), will be the big foreign currency trade of 2014, again*Aussie hostage to the US bond market, dragged down by weak commodities, and killed ADM’s takeover bid for GrainCorp.*Euro overvalued again at $1.36*Taper talk will support dollar,then eventually push it upthrough higher interest rates

  37. Long Dollar Basket (UUP)-Breaking Down

  38. Japanese Yen (FXY)-Major breakdown underwaylong the 1/$99-102 put spreadlong the the 1/$98-$101 put spread

  39. Short Japanese Yen ETF (YCS)-

  40. Euro (FXE)-Took profits on short

  41. Australian Dollar (FXA)-Talking down the Aussie againtook profits on the 12/$89-$91 call spread-get out if still in

  42. Emerging Market Currencies (CEW)

  43. Energy-Supply Glut *Accelerating US supply is killing the market*Creates a de facto tax cut for the rest of the world*Every $10 price cut adds 0.5% to global GDP*A peace deal with Iran on nukes could drop oil prices for another $20, as 3 million barrels a day in new supply hits the market.*International Energy Agency says US to become worlds top oil producer by 2016*Sell on next $5-$10 rally

  44. Crude-Breaking Down, $92 Targeting Hit

  45. United States Oil Fund (USO)

  46. Natural Gas (UNG)-Bouncing along the bottom

  47. Copper-Waiting for another China catalyst, also caught the gold disease

  48. Freeport McMoRan (FCX)-2013 Losers punished one last time

  49. Precious Metals-The Unloved commodity *Gold has no place in a paper world*Will the final bottom be $1,200, or $1,000?*Will we see it in 2014?*Yearend capitulation selling taking the barbarous relic to new lows*Don’t try to catch the falling knife

  50. Gold-Breaking to new lows