September 26, 2011 – Market Carnage Revisited

Featured Trades: (SPY), (IWM), (RSX), (EEM), (CU), (GLD), (JNK), (TBT), (TLT), (GLD), (USO), (FXA), (FXE), (UUP), (VIX) 1) Market Carnage Revisited. I have never seen a single word cost me so much money. That word would be 'significant', the word that the Federal Reserve added to the language in its recent release about the current risks to the economy. To the market, this … [Read more...]

September 26, 2011 – Quote of the Day

'If you're really long term, you should be really long term scared. At the end of the day, long term risk management is what you should be thinking about. '˜Long term' meaning only being bullish is ridiculous. You should be managing risk aggressively,' said Keith McCullough of Hedgeye Risk Management. … [Read more...]

September 22, 2011 – Last Chance to Attend the September 23 Las Vegas Strategy Luncheon.

Featured Trades:  (LAS VEGAS SEPTEMBER 23 STRATEGY LUNCHEON)   1) Last Chance to Attend the September 23 Las Vegas Strategy Luncheon. Come join me for lunch at the Mad Hedge Fund Trader's Global Strategy Update, which I will be conducting in Las Vegas at 12:00 noon on Friday, September 23, 2011. A three course lunch will be followed by a 30 minute PowerPoint … [Read more...]

September 22, 2011 – Order Execution 101

Featured Trades: (ORDER EXECUTION 101)   2) Order Execution 101. Given the sudden uptick in trade alerts I have been sending out to my Macro Millionaire subscribers, some 26 in August alone, I have been inundated with requests for how to execute these. So I thought I'd take some time today to expound on the basics of order execution 101. There are three basic … [Read more...]

September 22, 2011 – Do the Ratings Agencies Need New Typists?

Featured Trades: (DO THE RATINGS AGENCIES NEED NEW TYPISTS?), (TLT), (BAC), (C) 3) Do the Ratings Agencies Need New Typists? If there were ever a deep lagging indicator, it is a downgrade by a ratings agency. While the housing market peaked in 2006, these despised institutions didn't get around to marking paper down from triple 'A' to junk until four years … [Read more...]

September 22, 2011 – Quote of the Day

'The next phase in the development of China is the empowerment of the consumer. That is happening as we speak. The Chinese consumer is in much better shape than the American consumer,' said Daniel J. Arbess of Xerion Capital Partners. … [Read more...]

September 21, 2011 – Orlando November 10 Strategy Luncheon

Featured Trades: (NOVEMBER 10 STRATEGY LUNCHEON)   1) Orlando November 10 Strategy Luncheon. Come join me for lunch at the Mad Hedge Fund Trader's Global Strategy Update, which I will be conducting in Orlando, Florida on Thursday, November 10, 2011. An excellent meal will be followed by a wide ranging discussion and an open ended question-and-answer period. I'll … [Read more...]

September 21, 2011 – Macro Millionaire Punches Through to New All Time High

Featured Trades: (MACRO MILLIONAIRE PUNCHES THROUGH TO NEW ALL TIME HIGH), (SPY), (USO), (FXE), (FXF), (GLD), (IWM), (BAC)   2) Macro Millionaire Punches Through to New All Time High. Macro Millionaire, my innovative trade mentoring program, punched through to a new year to date return of 39.15%. Suring the same time period, which began on December 1, 2010, the … [Read more...]

September 21, 2011 – IMF Rings the Alarm for the Global Economy

Featured Trades: (IMF RINGS THE ALARM FOR THE GLOBAL ECONOMY) 3) IMF Rings the Alarm for the Global Economy. The International Monetary Fund just substantially revised down their growth outlook for 2012, saying that the global economy has entered a 'dangerous new phase.' Specifically, the world was cut from GDP growth of 4.5% to 4%, the US from 2.7% to 1.8%, … [Read more...]

September 21, 2011 – Apple's Next Stop: $1,000

Featured Trades: (APPLE'S NEXT STOP:$1,000), (AAPL) 4) Apple's Next Stop: $1,000. Watching Apple (AAPL) post a new all-time high today, I was struck by a wave of nostalgia. When I took a young, cocky, long haired, Levis wearing Steve Jobs around to meet Morgan Stanley's institutional investors to pitch an Apple secondary share offering 28 years ago, I vowed … [Read more...]

September 21, 2011 – Quote of the Day

'A year from now the dominoes will be falling in Europe. The world is going to be a more destabilized place'¦.The risk free rate isn't risk free any more. We're not growing as we should be because there is a diminishing rate of return for each additional dollar of debt. In a year, we're going to be in recession again,' said Kyle Bass, of the Dallas, … [Read more...]

September 20, 2011 – Traders Are ‘Lost’ With the Economic Data

Featured Trades: (TRADERS ARE 'LOST' WITH THE ECONOMIC DATA) 1) Traders Are 'Lost' With the Economic Data. Traders can be forgiven for believing that they are reliving an episode of the cult mystery TV show, 'Lost.' The economic data was truly a mixed bag last week, with lagging reports showing us that the economy is fine, while the most important leading indicators … [Read more...]

September 19, 2011 – Bill Ackman’s Hong Kong Dollar Play

Featured Trades: (BILL ACKMAN'S HONG KONG DOLLAR PLAY), (EWH)   2) Bill Ackman's Hong Kong Dollar Play. You are all well aware of my love affair with the Chinese Yuan (CYB), which I expect to appreciate substantially in coming years off the back of China's continuing economic miracle. Bick Ackman, of Pershing Square Capital Management fame, has come up with his own … [Read more...]

September 19, 2011 – Quote of the Day

'Average is over. If you just show up now for your job in an average way, that's not going to cut it anymore. James Reston, a famous columnist in the sixties and seventies, used to have my office, and he would come into work each day wondering what his seven competitors were going to write about. I come into work wondering about what my 70 million competitors are going … [Read more...]

September 16, 2011 – Watch Out for Those Dinosaur Turds

Featured Trades: (WATCH OUT FOR THOSE DINOSAUR TURDS) 3)Watch Out for Those Dinosaur Turds. The dinosaur bone market has crunched. Once a favorite collectable of high flying hedge fund managers, the prices of everything from tyrannosaurus rex to brontosaurus fossils have skidded. A recent auction of a triceratops skeleton failed to reach its minimum bid of $1 million. … [Read more...]

September 16, 2011 – Testimonial

4) Testimonial.  I am a 25 year veteran of the financial industry and run one of the largest wealth management teams at one of the largest banks in the country.  This is my second time subscribing, I'm always looking for good ideas.  My man, you are a freak. If this were a few hundred years ago we would burn you at the stake as a Warlock. I have never, ever, written a … [Read more...]

September 16, 2011 – Quote of the Day

'There's no retail inflows. The hedge fund community has derisked. So the algorithm based, high frequency traders have taken up the slack, and are now responsible for 70% of the total trading activity in the market every day. It's a very difficult environment to create alpha, or excess returns in. Are your clients frustrated? … [Read more...]

September 15, 2011 – Buy the Dip in Corn

Featured Trades: (BUY THE DIP IN CORN), (CORN), (DBA), (JJG) 1) Buy the Dip in Corn. The US Department of Agriculture released its monthly crop report on Monday, underlining the tremendously bullish conditions for corn, which I have been harping away about in this letter for months. What did the markets do? They sold off, delivering a classic 'buy the rumor, sell the … [Read more...]

September 15, 2011 – Selling Oil Again for a Hedge

Featured Trades: (SELLING OIL AGAIN FOR A HEDGE), (USO) 2) Selling Oil Again for a Hedge. With oil having bounced $5.50 over the last couple of days, I am going to flip back to the short side for several reasons, not all of which have to do with Texas tea. The trigger was oil's failure to rally in the wake of a surprisingly large draw down in inventories this … [Read more...]

September 14, 2011 – Trading Shifts to the Forex Market

Featured Trades: (TRADING SHIFTS TO THE FOREIGN EXCHANGE MARKET) 2) Trading Shifts to the Forex Market. Those of us who have been in the business for four decades have been overwhelmed by the growth of the foreign exchange business. Since the late sixties, it has grown from a handful of low level clerks speaking on transatlantic lines doing a few hundred million … [Read more...]

September 14, 2011 – The Technical/Fundamental Tug of War: Who Will Win?

Featured Trades: (THE TECHNICAL/FUNDAMENTAL TUG OF WAR: WHO WILL WIN?) 3) The Technical/Fundamental Tug of War: Who Will Win? For the last few weeks, I have had two groups of analysts screaming in my ears. Fundamental researchers are asserting that at $100 per share in earnings, generating a price earnings multiple of 11.5, stocks are at the historical bottom of … [Read more...]

September 14, 2011 – What's On the Menu?

Featured Trades: (WHAT'S ON THE MENU?) (FXE), (EURO), (UUP), (GLD)   4) What's On the Menu? I am posting these charts below from a variety of sources outlining some trades that I may execute in the near future. Call it my 'short watch list'. Look at the two longer term charts for gold, which seems to be putting in a more convincing top by the day. … [Read more...]

September 14, 2011 – Quote of the Day

'The stupid market cliche about catching a falling knife is actually happening now. This is a falling knife. You have to look at the market as a hot air balloon. You only want to grab it as it is going up. I don't think dollar cost averaging is the plan here,' said Bob Iaccino at Traderoutlook.com. … [Read more...]

September 13, 2011 – My Take on the 2012 Presidential Election

Featured Trades: (MY TAKE ON THE 2012 PRESIDENTIAL ELECTION) 1) My Take on the 2012 Presidential Election. As I write this, I am sitting at the San Francisco consulate of the People's Republic of China, awaiting the issuance of my business visa. Since I will soon be in the neighborhood, I plan to interview some companies that I want to buy on the next upswing in the … [Read more...]

September 13, 2011 – Quote of the Day

'An employer now has access to, not only cheap software, cheap automation, cheap robots, cheap labor, but cheap genius as well,' said Tom Friedman, a columnist for the New York Times. … [Read more...]

September 12, 2011 – Last Chance to Attend the September 16 Seattle Strategy Luncheon

Come join me for lunch for the Mad Hedge Fund Trader's Global Strategy Update, which I will be conducting in Seattle on Friday, September 16, 2011. A three course lunch will be followed by a 30 minute PowerPoint presentation and a one hour question-and-answer period. I'll be giving you my up-to-date view on stocks, bonds, currencies commodities, precious metals, and real … [Read more...]

September 12, 2011 – Quote of the Day

'For the last 20 years we used to trade inside a trend. There's no trend anymore. The day to day trade right now is what is the soup du jour, what is the trade of the day,' said Scott Bauer, a floor trader on the Chicago Mercantile Exchange. … [Read more...]

September 9, 2011 – Why I Covered My Gold Short

Featured Trades: (WHY I COVERED MY GOLD SHORT), (GLD)   1) Why I Covered My Gold Short. I have to tell you that I was just not feeling the love from my gold short when I came into the office Wednesday morning. You would have thought that, with a double top on the charts in place, there would be a move of the same ferocity we saw two weeks ago, when the barbarous … [Read more...]

September 9, 2011 – Hedge Funds Ramp Up Market Shorts

Featured Trades: (HEDGE FUNDS RAMP UP MARKET SHORTS), (SPX), (SPY) 2) Hedge Funds Ramp Up Market Shorts. Hedge funds have gotten much more aggressive on the short side, as recent data show, with enviable results. According to Data Explorers, and independent research boutique, emboldened market timers and macro players increased their shorts in industrial stocks by … [Read more...]

September 8, 2011 – Is the Second Shoe About to Drop on the Euro?

Featured Trades: (IS THE SECOND SHOE ABOUT TO DROP ON THE EURO?), (FXE), (FXF) 1) Is the Second Shoe About to Drop on the Euro? There were two pieces of news today that enabled the Euro (FXE) to benefit from a much needed relief rally. First, the German Supreme Court ruled in favor of the legality of the Greek bailout package. Then the Italian Senate approved a $70 … [Read more...]

September 8, 2011 – How US Job Losses Will End

Featured Trades: (HOW US JOB LOSSES WILL END), (FXI), (PIN), (EWY), (VNM) 2) How US Job Losses Will End. I was researching comparative Asian wage data the other day and was astounded with what I found. Textile workers earn $2.99 an hour in India (PIN), $1.84 in China (FXI), and $0.49 in Vietnam (VNM). This is an 18 fold increase in labor costs from ten cents an hour … [Read more...]

September 8, 2011 – Options for the Beginner

Featured Trades: (OPTIONS FOR THE BEGINNER) 3) Options for the Beginner. I strongly urge readers of this letter to log on to Amazon and by a copy of Options for the Beginner and Beyond by W. Edward Olmstead. Options contracts offer investors a wonderful instrument for minimizing risk, while maximizing the upside, and I am going to recommend many more such strategies in … [Read more...]

September 8, 2011 – Quote of the Day

'Go where the growth is, and where the debt isn't, and that is emerging markets,' said David Donabedian, the chief investment officer of Atlantic Trust Co., the private wealth management arm of Invesco. … [Read more...]

September 6, 2011 – August Nonfarm Payroll Torpedoes Market Rally

Featured Trades: (AUGUST NONFARM PAYROLL TORPEDOES MARKET RALLY) 2) August Nonfarm Payroll Torpedoes Market Rally. Economist and market strategists alike were stunned by the August nonfarm payroll report showing zero job growth. The headline unemployment rate stayed unchanged at 9.1%. The reports for June and July were revised down a gut punching 58,000. Employers … [Read more...]

September 6, 2011 – Quote of the Day

'Patience is not a word that is fixated on two year election cycles. China has a five year plan. We have a five minute plan,' said Steven Roach, former non-executive chairman of Morgan Stanley Asia. … [Read more...]

September 2, 2011 – Come Join Me for Lunch in Hong Kong on Friday, October 21, 2011

Featured Trades: (HONG KONG STRATEGY LUNCHEON) 1) Come Join Me for Lunch in Hong Kong on Friday, October 21, 2011. Come join me for lunch at the Mad Hedge Fund Trader's Global Strategy Update, which I will be conducting in Hong Kong on Friday, October 21, 2011. A three course meal will be followed by a wide ranging discussion and an extended minute … [Read more...]

September 2, 2011 – Itching to Get Into Corn

Featured Trades: (ITCHING TO GET INTO CORN), (CORN), (JJG), (DBA), (POT), (MOS), (AGU), (CAT), (DE) 2) Itching to Get Into Corn. Long term readers of this letter know that I have long been banging away on the fact that the world is making people faster than the food to feed them. According to the World Bank, the world's population is expected to jump 2 billion, from … [Read more...]

September 1, 2011 – Why I'm Flipping to the Short Side

Featured Trades: (WHY I'M FLIPPING TO THE SHORT SIDE), (BAC) 1) Why I'm Flipping to the Short Side. We have had a nice run here on (BAC), posting a profit of 20% in just one week. The stock market is now at the top end of a one month range, so I am going to cut back some risk. The big gainers are always the first to go on the chopping block. We have had a great … [Read more...]

September 1, 2011 – Consumers are Telling Porky Pies

Featured Trades: (CONSUMERS ARE TELLING 'PORKY PIES')   2) Consumers are Telling Porky Pies. When I was working on the trading desk at the London office of Morgan Stanley I became familiar with the particular argot they speak in the East End, otherwise known as 'cockney'. A form a slang originally developed to keep bobbies guessing their true … [Read more...]