January 31, 2011 – Learning About VIX the Hard Way

Featured Trades: (THE VIX SPIKE), (VXX), (Q4 GDP)   1) Learning About VIX the Hard Way. We certainly received a highly instructive lesson on how the volatility index (VIX) works on Friday. All it took was a ten point drop in the S&P 500 to trigger a stampede to buy insurance against further declines, taking the closely watched barometer from $15.90 to $20 in … [Read more...]

January 31, 2011 – So Close, Yet So Far on Gold

Featured Trades: (GOLD), (GLD), (DGZ), (GLL) 2) So Close, Yet So Far on Gold. Close, but no cigar on getting out of my gold puts on Friday. We opened low enough on Friday morning to get within striking distance of my downside target for the barbarous relic at $1,280. But once the rout in equities started in earnest, it was off to the races for gold, and it was all over … [Read more...]

January 31, 2011 – Taking Some Cover on the (TBT)

Featured Trades: (TBT) 3) Taking Some Cover on the (TBT). The global equity markets are 'cruisin for a bruisin.' They are so overextended on the charts it is frightening, and the time to pay the piper is coming. I'm not looking for a collapse, just a missionary style 5%, 60 point correction, to at least the 50 moving average at 1,248 in the S&P 500, and then … [Read more...]

January 28, 2011 – Now There’s Really Only Two Weeks Left Until The Mad Hedge Fund Trader February 11 Orlando Strategy Luncheon

Featured Trades: (ORLANDO STRATEGY LUNCHEON)   1) Now There's Really Only Two Weeks Left Until The Mad Hedge Fund Trader February 11 Orlando Strategy Luncheon. Come join me for lunch for the Mad Hedge Fund Trader's Global Strategy Update, which I will be conducting in Orlando, Florida on Friday, February 11, 2011. A three course lunch will be followed by a 45 … [Read more...]

January 28, 2011 – Japan’s Bill Is Now Due

Featured Trades: (JAPAN'S BILL IS NOW DUE), (YCS), (FXY) 2) Japan's Bill Is Now Due. Do the hard work and the accidents happen in your favor. This is what I have been hammering away with at my junior traders and analysts for decades. You won't find a more clear illustration of this time worn maxim than Standard & Poors' surprise of Japanese government debt last … [Read more...]

January 28, 2011 – The Gold Sell Off Accelerates

Featured Trades: (THE GOLD MELTDOWN), (GLD), (GLL), (DGZ) 3) The Gold Sell Off Accelerates. Two weeks ago, I urged readers to take advantage of the coming collapse in gold. This development is now well in progress, and is accelerating faster than I anticipated. Perhaps I gave it a push? Things are happening so fast in the gold pits that it feels like the clock is on … [Read more...]

January 28, 2011 – Testimonial

4) Testimonial. 'For the past three years, I have followed the advice of another 'trading' subscription. During the two months that I have participated in your 'Mad Hedge Fund Trader' recommended trades, I have banked and surpassed my gains of those three years. Plus your recommended trades that I am currently holding have a similar paper gain. Wow! In two … [Read more...]

January 28, 2011 – Quote of the Day

'It is almost dishonest to build up an accumulated debt for the Congress of the United States to meet in 1980. We can't do that. We can't sell the United States short in 1980, any more than in 1935,' said Franklin Delano Roosevelt about his efforts to fund social security entirely from its own revenues. … [Read more...]

January 27, 2011 – Another Nail in the Market's Coffin

Featured Trades: (ANOTHER NAIL IN THE COFFIN FOR GLOBAL MARKETS), (SPX), (SPY), (TNX) 1) Another Nail in the Market's Coffin. I think it was very interesting not to see what happened today, but what didn't. The Federal Reserve announced that it would continue its purchase of $600 billion in debt securities and keep interest rates low for the indefinite … [Read more...]

January 27, 2011 – The Price of Stardom at Davos

Featured Trades: (DAVOS WORLD ECONOMIC FORUM) 2) The Price of Stardom at Davos. When I was a director of one of the largest banks in Switzerland, I found myself a frequent visitor to the Alpine village of Davos. In years gone by, we provided the loans to the Canton of Graubunden needed to build the lifts and gondolas in Davos to develop it into a world class ski resort … [Read more...]

January 26, 2011 – Watch out for the Black Swans

Featured Trades: (WHAT OUT FOR THE BLACK SWANS)   1) Watch out for the Black Swans. It is not my intention to ruin your day. But I may well do that if you read this piece. While traders pile on their longs with reckless abandon, and retail flows into equity mutual funds turn positive for the first time in two years, I am hearing a rising tide of negativity from … [Read more...]

January 26, 2011 – Beware the Coming Collapse of Gold

Featured Trades: (BEWARE THE COMING COLLAPSE OF GOLD), (GLD), (SLV), (PPLT), (PALL), (GLL), (DGZ) 2) Beware the Coming Collapse of Gold. Last year's sure thing is rapidly turning into this year's sure loser. After bringing in a torrid 29% return in 2010, the barbarous relic has only managed a flaccid 7% loss so far this year, much to the distress of hedge funds and … [Read more...]

January 25, 2011 – Touching Base With Karl Denninger

Featured Trades: (TOUCHING BASE WITH KARL DENNINGER)   1) Touching Base With Karl Denninger. I managed to catch up with my friend Karl Denninger, the peripatetic founder of the Florida based Market Ticker, a highly entertaining and prescient, if not irreverent daily blog. Karl is convinced that the current move up in equity markets is a load of baloney and is … [Read more...]

January 25, 2011 – Buying Straw Hats in the Dead of Winter

Featured Trades: (VOLATILTIY INDEX), (VIX), (FFIV), (SPX) 2) Buying Straw Hats in the Dead of Winter. I am one of those demented people who buys flood insurance when the sun is shining and sun tan lotion by the gallon from Costco in the dead of winter. I am such an inveterate bargain hunter that I even buy Christmas ornaments during the January sales when retailers are … [Read more...]

January 24, 2011 – The Choppy Road Ahead

Featured Trades: (DAVID HALE ON THE ECONOMY) 1) The Choppy Road Ahead. Recently, I managed to catch up with my old friend, David Hale of David Hale Global Economics (click here for their site). While swilling a few gin and tonics within the oak paneled walls in the bar at Chicago's exclusive University Club, he outlined his case for the economy for the coming … [Read more...]

January 24, 2011 – Will Gold Coins Suffer the Fate of the $10,000 Bill?

Featured Trades: (THE FATE OF GOLD COINS) 3) Will Gold Coins Suffer the Fate of the $10,000 Bill? The conspiracy theorists will love this one. Buried deep in the bowels of the 2,000 page health care bill is a new requirement for gold dealers to file Form 1099's for all retail sales by individuals over $600. Specifically, the measure can be found in section 9006 of the … [Read more...]

January 24, 2011 – My Personal Leading Economic Indicator

Featured Trades: (MY PERSONAL LEADING ECONOMIC INDICATOR) 4) My Personal Leading Economic Indicator.  I just flew over one of my favorite leading economic indicators yesterday. Honda (HMC) and Nissan (NSANY) import millions of cars each year through their Benicia, California facilities, where they are loaded on to hundreds of rail cars for shipment to points inland as … [Read more...]

January 24, 2011 – Quote of the Day

'If you measure the stock market not in dollars, but in gold, it is down 80% since 1999. I no longer regard the US dollar as a valid unit of account. People shouldn't value their wealth in dollars because one day, everyone will be billionaires,' said ultra bear, Marc Faber, of the Gloom, Boom, and Doom Report. … [Read more...]

January 21, 2011 – Only Two Weeks Left Until The Mad Hedge Fund Trader February 11 Orlando Strategy Luncheon

Featured Trades: (ORLANDO STRATEGY LUNCH) 1) Only Two Weeks Left Until The Mad Hedge Fund Trader February 11 Orlando Strategy Luncheon. Come join me for lunch for the Mad Hedge Fund Trader's Global Strategy Update, which I will be conducting in Orlando, Florida on Friday, February 11, 2011. A three course lunch will be followed by a 45 minute PowerPoint presentation and … [Read more...]

January 21, 2011 – The Muni Bond Myth

Featured Trades: (THE MUNI BOND MYTH), (MUB), (JNK), (TBT) 2) The Muni Bond Myth. Have I seen This movie before? Two years ago, analysts were predicting default rates as high as 17% for Junk bonds in the wake of the financial meltdown, taking yields on individual issues up to 25%. Liquidity in the market vaporized, and huge volumes of unsold paper overhung the market. … [Read more...]

January 20, 2011 – Time to Tighten Up Those Stops

Featured Trades: (SPX), (BAC), (CSCO), (DIG), (SSO), (GLD), (TBT), (JJG) 1) Time to Tighten Up Those Stops. Well, the party couldn't go on forever. Yesterday, the S&P 500 took its first 1% hit since November, and the NASDAQ took an even more severe spanking. Like in an Agatha Christie murder mystery, risk has made a sudden reappearance on the scene, after … [Read more...]

January 20, 2011 – Look What I'm Seeing in Gold

Featured Trades: (GLD) 2) Look What I'm Seeing in Gold. Call this a 'rolling top' or a 'head and shoulders top', but it is a top nonetheless, which is making my bear put spread of the gold ETF (GLD) look smarter by the day. If our current sell off is truly a binary 'RISK OFF' development rather than a reshuffling of the deck among asset … [Read more...]

January 19, 2011 – Time for a Victory Lap

Featured Trades: (IBM), (AAPL), (CSCO), (SSO), (TBT), (GLD), (DIG) 1) Time for a Victory Lap. I'm sorry I'm late with the letter today, but I am out of breath, having run victory laps all morning. IBM (IBM) reports blowout earnings, and Apple (AAPL) absolutely knocked the cover off the ball. It kind of makes my Cisco Systems (CSCO) options position look … [Read more...]

January 19, 2011 – Time to Short the Garlic Eaters

Featured Trades: (FXE) 2) Time to Short the Garlic Eaters. The garlic eaters don't want to repay their debts, and the beer drinkers don't want to lend them any more money. That pretty much sums up the financial tensions that exist within Europe right now. The PIIGS countries of Portugal, Ireland, Italy, Greece's, and Spain are lurching from one emergency … [Read more...]

January 18, 2011 – All That is Gold Does Not Glitter

Featured Trades: (GOLD), (GLD), (DGZ), (GLL) 1) All That is Gold Does Not Glitter. In the wake of gold's panic inducing $30, one day sell off on Friday, players across the hedge fund universe are reassessing their relationship with the barbarous relic. What started out as a long term commitment is suddenly morphing into a short term fling, or maybe even a one night … [Read more...]

January 18, 2011 – The 12 Day Year

Featured Trades: (THE 12 DAY YEAR) 2) The 12 Day Year. I have reported in the past on the value of the Friday-Monday effect, whereby the bulk of the year's performance can be had through buying the Friday close in the stock market and then selling the Monday close. Well, I have discovered a further distillation of this phenomenon. During 2010, the S&P 500 rose by … [Read more...]

January 13, 2011 – The Case Against Treasury Bonds

(SPECIAL TREASURY BOND ISSUE) Featured Trades: (THE TREASURY BOND CRASH IN PROGRESS) 1) The Case Against Treasury Bonds. If you want to delve into the case against the future of US Treasury bonds in all its glory, take a look at the November/December issue of Foreign Affairs, the establishment bimonthly journal read by academics, intelligence agencies, and … [Read more...]

January 13, 2011 – The Technical Case for the TBT

(SPECIAL TREASURY BOND ISSUE) Featured Trades: (TBT), (THE TECHNICAL CASE AGAINST BONDS) 2) The Technical Case for the TBT. Louise Yamada, one of the most widely followed technical analysts in the market, says the 29 year bull market in Treasury bonds is coming to a close. Looking at the 200 year history of interest rates in the US, such bull markets are … [Read more...]

January 13, 2011 – Feel Like Investing in a State Sponsor of Terrorism?

(SPECIAL TREASURY BOND ISSUE) Featured Trades: (AFRICA), (GAF), (EZA), (AFK) 3) Feel Like Investing in a State Sponsor of Terrorism? How about a country whose leaders have stolen $400 billion in the last decade and have seen 300 foreign workers kidnapped? Another country lost four wars in the last 40 years. Still interested? How about a country that suffers one of … [Read more...]

January 12, 2011 – The Population Boom

Featured Trades: (THE POPULATION BOOM)   1) The Population Boom. On this most important day of the crop report, I thought that I would refer you to one of my favorite unconventional research sources, National Geographic Magazine. In their century long coverage of exotic places, cultures, and practices, they inadvertently shed light on broad global trends … [Read more...]

January 12, 2011 – Storm Clouds are Gathering for Oil

Featured Trades: (ALASKA OIL SPILL), (DIG) 3) Storm Clouds are Gathering for Oil. Spill six barrels of oil in a remote basement in Northern Alaska, and all of a sudden, 15% of the US oil supply is cut off. That was the response of officials at the Trans Alaska Pipeline over the weekend, no doubt hyper sensitized to accidents in the wake of last year's Gulf oil … [Read more...]

January 11, 2011 – Las Vegas Strategy Luncheon Review

Featured Trades: (LAS VEGAS STRATEGY LUNCH REVIEW)   1) Las Vegas Strategy Luncheon Review. It has been a full life. What else could I conclude, finding myself in a luxury suite at the Las Vegas Wynn Hotel with two dozen drunken twenty something's playing 'beer pong' at 2:00 am? It is amazing what some people can do with a ping pong ball. If there was ever a … [Read more...]

January 10, 2011 – The Mad Hedge Fund Trader Interviews Charles Nenner in 2011

Featured Trades: (CHARLES NENNER ON HEDGE FUND RADIO), (SPX), (SOX), (QQQQ), (EEM), (CSCO), (BAC), (BIDU), (XOM), (CU), (OIL), (OXY), (WHEAT), (CORN), (DBA), (JJG), (FXE), (FXA), (FXY), (YCS) My guest on Hedge Fund Radio this week is Charles Nenner of Charles Nenner Research in Amsterdam. Charles hails from Holland, and has a long career that includes stints at … [Read more...]

January 6, 2011 – 2011 Global Forecast

2011 GLOBAL FORECAST Featured Trades: (SPX), (QQQQ),(CSCO), (XLF), (BAC), (EEM),(EWZ), (RSX), (PIN), (FXI), (TUR), (EWY), (EWT), (IDX), (GS), (MS), (TBT), (JNK), (PHB), (HYG), (PCY), (FXC), (FXA), (YCS), (FXY), (CYB), (FCX), (VALE), (DIG), (RIG), (JOY), (KOL), (CCJ), (FSLR), (UNG), (JJG), (MOO), (DBA), (MOS), (MON), (AGU), (POT), (CCJ), (NLR), (PHO), (FIW), … [Read more...]

January 5, 2011 – The Mad Hedge Fund Trader’s February 11 Global Strategy Luncheon

Featured Trades: (ORLANDO STRATEGY LUNCHEON)   1) The Mad Hedge Fund Trader's February 11 Orlando Global Strategy Luncheon. Come join me for lunch for the Mad Hedge Fund Trader's Global Strategy Update, which I will be conducting in Orlando, Florida on Friday, February 11, 2011. A three course lunch will be followed by a 45 minute PowerPoint presentation and a … [Read more...]

January 5, 2011 – The Bank of America Settlement is Huge

Featured Trades: (THE BANK OF AMERICA MELT UP), (BAC) 3) The Bank of America Settlement is Huge. For those Macro Millionaires who bought the (BAC) March, 2011 $12-$14 call spread that I recommended on December 7, this is your big payday. The North Carolina based 'too big to fail' bank announced a settlement with government agencies Fannie Mae and Freddie Mac … [Read more...]

January 3, 2011 – My Run in With the Law

Featured Trades: (MY RUN IN WITH THE LAW) 3) My Run in With the Law. I'm sorry I'm late getting my letter out today. I was racing home from San Francisco on Highway 24 when the California Highway Patrol pulled me over for doing 80 mph in a 65 mph zone. The officer asked me where the fire was, and I told him I was rushing back to my office to get my investment … [Read more...]

January 3, 2011 – The Problem With GM

Featured Trades: (THE PROBLEM WITH GM), (GM) 4) The Problem With GM. Like a heroin addict who just can't wean himself off of the good stuff, General Motors (GM) is going back into subprime lending to finance new auto sales. Although the much diminished company is still has a large government ownership,  and has made great strides at reforming its errant ways, they … [Read more...]

January 3, 2011 – The New Deflation

Featured Trades: (THE NEW DEFLATION) 5) The New Deflation. It seems that all you hear about these days is deflation. That is certainly what the bond market is telling us, with my screen blaring at me a miserable 2.93% yield for the ten year Treasury bond. But there is a new definition for this economic malady that applies to us hapless consumers. In the new … [Read more...]