Central Bank Bazooka Sends Markets Flying

Santa Claus

The world’s major central banks launched a coordinated attempt to restore liquidity to the financial markets today, sending risk assets everywhere flying. The group moved to substantially lower interbank dollar swap rates, from 100 to 50 basis points. These swaps involve Federal Reserve dollar deposits with the European Central Bank and offsetting ECB Euro deposits with the … [Read more...]

China’s Rate Cut is a Game Changer

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For the first time in three years, China (FXI) has cut its prime lending rate by 50 basis points. The timing caught many analysts by surprise, as such move was not expected until the lunar new year in early February. Perhaps recent data showing collapsing exports prompted the Mandarins in Beijing to hurriedly move up the timetable. The Middle Kingdom’s action is one of the … [Read more...]

Watch out for the New “RISK ON” ETN (ONN)

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Mark Fisher of MBF Asset Management and Dennis Gartman of the eponymous Gartman Letter joined forces today to launch a new exchange traded note, or ETN, that promises to capture the “RISK ON” trade. The instrument is designed as an improvement over the old Volatility Index ETF where traders attempted to capture short term market swings. The note has the following … [Read more...]

December 1, 2011 – Quote of the Day

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“I wouldn’t want to see everyone get down to where Detroit is before we declare a bottom in residential housing,” said David Blitzer, chairman of the S&P 500 Index Committee. … [Read more...]

Trade Alert – (JEF) Nov. 30, 2011

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As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. This is your chance to ‘look over’ John Thomas’ shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen. … [Read more...]

September Case- Shiller Delivers Housing Blow

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My worst fears about the deteriorating state of the US residential housing market were confirmed today with the release of the closely watched Case-Shiller Home Price Index. Nationwide, Q3 delivered a 3.9% decline in home prices, hot on the heels of a whopping 5.8% plunge in Q2. Most markets are at 8-10 year lows with the exception of Detroit, which is plumbing a new 20 year … [Read more...]

Austerity Hits Wall Street

ny-taxi-cabs

This year, your bonus is that you get to keep your job. That is the bad news that will be dished out to many disappointed staff during annual reviews at the major Wall Street firms this year. We all know that volumes have been trading at subterranean levels which have created a real drought of commission incomes. New regulations imposed by Dodd-Frank and the Volker rule mean … [Read more...]

November 30, 2011 – Quote of the Day

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“We’re spending billions in Iraq and Afghanistan. Let’s rebuild America first. If you build us a bridge or a school in West Virginia we won’t blow it up and we won’t burn it down,” said Senator Joe Manchin. … [Read more...]

Bear Trap Sprung

lemmings

The coming bear trap that I warned about last week sprung this morning on the non-subscribing unwary, triggering panic buying by short sellers in all “RISK ON” assets. Oil (USO), gold (GLD), silver (SLV), copper (CU), and foreign currencies all moved in lockstep to the upside. The trigger was news that leaked out over the weekend that the International Monetary Fund would make … [Read more...]

The Case Against Treasury Bonds

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If you want to delve into the case against the long term future of US Treasury bonds in all their darkness, take a look at Foreign Affairs, the establishment bimonthly journal read by academics, intelligence agencies, and politicians alike, which I am sure you all have sitting on your nightstands. In a well-researched and thought out article penned by Roger C. Altman and … [Read more...]

Time to Short the Garlic Eaters

merkle

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 financing to the next. European interest rates are sky high. Never mind that much … [Read more...]

My Personal Leading Economic Indicator

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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 far as Chicago. Three years ago, when the US car market shrank to an annualized 8.5 million units, I flew … [Read more...]

Will Gold Coins Suffer the Fate of the $10,000 Bill?

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The conspiracy theorists will love this one. Buried deep in the bowels of the 2,000 page health care bill was 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 Patient Protection and Affordability Act of 2010. For foreign readers unencumbered by such concerns, … [Read more...]

The 12 Day Year

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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 143 points. Some 134 points of this was racked up on the first … [Read more...]

Surviving Thanksgiving

THANKSIVING

The Mad Hedge Fund Trader is taking a break for the next few days to take Turkey with the expanded family. A 28 pound bird made the ultimate sacrifice, and will be accompanied with mashed potatoes, gravy, stuffing, potato salad, mince pie, and a fine Yamhill Chardonnay. I ate an entire pumpkin pie last night just to give my digestive system an early warning that some heavy … [Read more...]

IMF Euro Bail Out Attempt Flops

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The International Monetary Fund announced a new facility for members to address a short term liquidity crisis. The measure is aimed at beleaguered Europeans girding themselves for a steady worsening of their sovereign debt crisis in the hope of “breaking the chain of contagion.”  But the measure is more of a squirt gun than a bazooka. Specifically, the IMF has offered 6 … [Read more...]

Film Review of “Margin Call”

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Now it’s time for some cultural edification. I first became aware of “Margin Call” as a pre-production project two years ago when news leaked out that the principal actors, Kevin Stacey, Demi Moore, Stanley Tucci, and Jeremy Irons, were reading the Diary of a Mad Hedge Fund Trader to learn about the industry and get in character. The plot covers a 24-hour period on the eve … [Read more...]

November 23, 2011 – Quote of the Day

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“Washington got the wrong message from the debt ceiling debate. They got the message that the downgrade didn’t matter very much when it came to the US Treasury’s ability to float debt. It’s the wrong message. We are watching a major economy like Italy having trouble getting financing from international capital markets. One day it will come to the US,” said Federal Reserve … [Read more...]

Sold Out! Last Chance to Sign Up for the November 25 Portland Strategy Luncheon

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Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Lunch, which I will be conducting in Portland, Oregon at 12:00 noon on Friday, November 25, 2011, the day after Thanksgiving. A three course lunch will be followed by a PowerPoint presentation and an extended question-and-answer period. I’ll be giving you my up-to-date view on stocks, bonds, currencies, … [Read more...]

Watch Out for the Bear Trap

bear

The volatility index (VIX) is just not buying this sell off. Even with the Dow down over 300 today, the (VIX) has only managed a meager 3% gain on the day. With a move in equities of this magnitude, you would expect volatility to rise by 15% or more. If traders and investors really believed that the risk markets were really going to crash to new lows, they would be paying … [Read more...]

Two Cheers for Paris Hilton

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How unpopular is Congress? Freshman senator Michael Bennet of Colorado, who recently compiled the results of a popularity public opinion poll showing how far in the dumps the Congressional reputation has fallen. Only Fidel Castro is more despised than our august representatives on capital hill. 40% IRS 16% BP during the Gulf oil spill 15% Paris Hilton 11% US reverts to … [Read more...]

Testimonial

Overworked2-8

I love it John. The analysis is great - and the trades are limited to a dozen or so vehicles I can follow. You make it so easy for us. The service continues to improve - alerts are more timely, text alerts are working nicely. My only wish is the webcasts were regularly posted same day - waiting until the next day is tough (only been a few times). And I've had a darn good … [Read more...]

November 22, 2011 – Quote of the Day

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“Europe is really too far away to get the American family to cancel that trip to Disney World. That is the guts of it,” said Federal Reserve Governor James Bullard. … [Read more...]

SPECIAL CHINA ISSUE

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  I am writing this from the back of a taxi in Hong Kong’s Central district. My meetings with assorted bankers, hedge fund managers, Taipans, and the press stretched on longer than expected, with the result that I am now stuck in rush hour traffic on the way to the airport. So I might as well use the time productively and sum up my thoughts on my recent trip to … [Read more...]

November 21, 2011 – Quote of the Day

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“The asymmetric risk is more on the upside than on the downside because people are prepared for the downside,” said Lawrence Fink, CEO of Blackrock, a manager of $3.3 trillion in assets. … [Read more...]

Trade Alert Update- (FXE) November 18, 2011

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As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. … [Read more...]

Trade Alert – (FXE) November 18, 2011

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As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. … [Read more...]

“RISK OFF” Strikes Again

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You would think that this was going to be a good day. Weekly jobless claims fell to 388,000, a new six month low. New permits for home construction in October were up 10.2%. The October CPI even fell by 0.1%. But the second that Spanish bond yields spiked, it was all over but the crying. The S&P 500 opened weak, and then proceeded to plunged 25 points, decisively … [Read more...]

Who Says There Aren’t Any Jobs?

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While recently winging my way across the South Pacific, I spotted an unusual job offer: WANTED: Social worker, tax free salary of $60,000 with free accommodation and transportation, no experience necessary, must be flexible and self-sufficient. With the unemployment rate stuck at 9.1%, and running as high as 45% for recent college grads, I was amazed that they were even … [Read more...]

Testimonial

Overworked2-8

I've been reading your blog for a while and found it a helpful beacon in a sea of confusing and contradictory information as I try and make sense of the world (and try and make money from sense!). Kind regards. Toby London, England … [Read more...]

November 18, 2011 – Quote of the Day

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“We know things are upside down when we have an Italian central banker and a German pope. That’s not the way it is supposed to be,” said Steve Cortez of Veracruz Research. … [Read more...]

Sold Out! November 25 Portland Strategy Luncheon

Screen shot 2011-10-25 at 4.03.35 PM

Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Lunch, which I will be conducting in Portland, Oregon at 12:00 noon on Friday, November 25, 2011, the day after Thanksgiving. A three-course lunch will be followed by a PowerPoint presentation and an extended question-and-answer period. I’ll be giving you my up-to-date view on stocks, bonds, currencies, … [Read more...]

Why Residential Real Estate Will Not Recover

foreclosure-sign

One of the most frequently asked questions at my recent round of strategy luncheons, seminars, and keynote speaking engagements has been “Is it time to buy a home?” I responded with “No, no, a thousand times no,” and proceeded to rail off the countless reasons. My answer always piques listeners’ interest, as 67% of Americans are still homeowners, and probably more at these … [Read more...]

Bottom Feeding in Real Estate

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I was driving through a prominent San Francisco neighborhood last Sunday, looking for a McMansion open house. When I came to one key intersection there were more than a dozen signs directing me to competing offerings. What a joke. And the agent told me that market conditions were gradually improving! It looks like current and former millionaires are in a rush to unload their … [Read more...]

What’s Up With Gold?

Gold-Coins-Gold-Bullion-and-Other-Gold-Invesment

Have you ever held a basketball underwater in a swimming pool and let go? It flies to the upside and pops you in the nose. That is exactly what gold is doing now. After the barbarous relic peaked at $1,922 on August 24, it traded like an absolute pig, giving up 20% in a matter of weeks. I managed to coin it with a couple of quick in and out trades in (GLD) puts, some doubling … [Read more...]

The Ultra Bull Case for Gold

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I am constantly barraged with emails from gold bugs who passionately argue that their beloved metal is trading at a tiny fraction of its true value, and that the barbaric relic is really worth $5,000, $10,000, or even $50,000 an ounce (GLD). They claim the move in the yellow metal we are seeing is only the beginning of a 30 fold rise in prices similar to what we saw from 1972 … [Read more...]

Revisiting the First Silver Bubble

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With smoke still rising from the ruins of the recent silver crash, I thought I'd touch base with a wizened and grizzled old veteran who still remembers the last time a bubble popped for the white metal. That would be Mike Robertson, who runs Robertson Wealth Management, one of the largest and most successful registered investment advisors in the country (click here for his site … [Read more...]

November 16, 2011 – Quote of the Day

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“The greatest show on earth is happening elsewhere. Southern trade is becoming turbocharged,” said Stephen King, chief economist at HSBC, about the enormous new trading routes forming between Asia and Latin America, who calls the network the “Southern Silk Road.”   … [Read more...]

Meet the Teflon Market

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Pound away at this market all you want, and it just refuses to go down. In recent weeks we have received a torrent of bad news from Europe, including the fall of governments in Greece and Italy, and the S&P 500 index keeps migrating back to the 1,260 level, as if attracted by some supernatural, magnetic force. It is no coincidence that this is where the closely followed big … [Read more...]

The Road to Singapore

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I am writing this from the polished teak floored, white columned, veranda of the historic Raffles Hotel in Singapore. Exotic tropical birds with huge curved bills are calling each other from the betel nut trees. I am somewhat peeved, as the Sir Stamford Raffles Suite which I have reserved is not yet available. A visiting head of state shacked up with his mistress has overstayed … [Read more...]

Testimonial

man

I have been following your trades for a while, to the tune of several hundreds of thousands in profits. Kindly sign me up to the "A" team. Even after investing for over 30 years, some as a Wall St. pro, I need help with this market. Keep up the good work. BF … [Read more...]

If Demographics is Destiny, Then America’s Future Sucks

HOUSE20FOR20SALE

Desperate homeowners counting on a "V" shaped recovery in residential real estate prices to bail them out better first take a close look at global demographic data, which tells us there will be no recovery at least another 15 years. I have been using the US Census Bureau's population pyramids as long leading indicator of housing, economic, and financial market trends for the … [Read more...]

November 10, 2011 – Quote of the Day

Showwhite

“When I came into Disney, it was a brand, yes, but a museum mostly. It’s was not all about Pinocchio and Snow White. We had to look forward,” said Michael Eisner, the former CEO of Walt Disney (DIS).   … [Read more...]

SOLD OUT! Last Chance to Join the Orlando November 10 Strategy Luncheon

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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 be giving you my up-to-date view on stocks, bonds, currencies, commodities, precious metals, and real … [Read more...]

Silver Is Starting to Shine

Silver-Panda

I received an urgent call from my friend at Fidelitrade (http://fidelitrade.com/) this morning, a leading dealer in 1,000 ounce bars of gold and silver. He had just been cleaned out of the 1,000 ounce silver bars at $34,930 each, and there was nothing in the pipeline. What the hell was going on with silver? I tried to calm him down with my usual measured, rational, global, … [Read more...]

Take a look at Jeffries

swan

I have an unusually sensitive nose. Maybe that is because it is so big. It is particularly attuned to detecting bullpucky in broker research reports. So when an analyst recently downgraded the mid-level broker, Jeffries & Co (JEF), on the back of its European debt exposure, the stench was overwhelming. I went to the website at http://www.jefco.com/ and had a quick look … [Read more...]

November 8, 2011 – Quote of the Day

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“The bond markets are telling the truth about the financial markets right now. It’s not being told by the equity markets,” said Constance Hunter, chief economist at Aladdin Capital Management of bond house.   … [Read more...]

Trade Alert Update – (SLV) November 8, 2011

slider-05-trader-alert

As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. This is your chance to ‘look over’ John Thomas’ shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen. … [Read more...]

Trade Alert – (SLV) November 8, 2011

slider-05-trader-alert

As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. This is your chance to ‘look over’ John Thomas’ shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen. … [Read more...]

What’s up with BYD?

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When I first bought shares in the Chinese electric car manufacturer, BYD (BYDDF) (or Build Your Dreams) in 2009 on the heels of Warren Buffet’s 10% investment, it looked like a total home run. The stock soared from $1.50 to $11, given me a paper return of 730%. Undercover, I Totally Blend Last year, the stock started to roll over, retracing all the way back to my cost. I … [Read more...]

European Style Homeland Security

CleeseJohn2

The English are feeling the pinch in relation to recent events in Libya, and have therefore raised their security level from "Miffed" to "Peeved." Soon, though, security levels may be raised yet again to "Irritated" or even "A Bit Cross." The English have not been "A Bit Cross" since the blitz in 1940, when tea supplies nearly ran out. Terrorists have been re-categorized from … [Read more...]

November 8, 2011 – Quote of the day

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“There are more beauty parlors than there are beauties,” said the late CBS commentator, Andy Rooney. The same can be said about stock brokers. He also said “I just wish insignificance had more stature.”   … [Read more...]

Testimonial

Testimonial

A full double on my FXE puts means…a dancing girl for you. You deserve it! Raising a glass to the Greek Prime Minister as I type this. Thanks John. You rock!! CK … [Read more...]

Goodbye Steve Jobs, Hello Dividend?

aaple

Analysts continue to be stunned by the rate at which cash is rolling into Apple (AAPL). At current cash flows, the company’s hoard is expected to grow from $81 billion to $120 billion by next June, an increase of nearly $200 million a day! So far, the company has resisted every entreaty to part with some of this dosh, either through a share buyback or a dividend. Now some … [Read more...]

October Nonfarm Payroll Surprise Points to Market Upside

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The October nonfarm payroll came in at a pedestrian 80,000, compared to 158,000 in September, a rate that is somewhat less than what matches population growth. But it is the numbers behind the numbers that will deliver the big market impact. The headline unemployment rate came in at a nosebleed 9.0%. August and September were revised up a whopping 102,000. This is final … [Read more...]

Trade Alert- (JEF) Update November 6, 2011

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Trade Alert-Update regarding the alert on November 4, 2011. As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. This is your chance to ‘look over’ John Thomas’ shoulder as he gives you unparalleled insight on major world financial trends BEFORE they … [Read more...]

Trade Alert – (JEF) November 4, 2011

As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. … [Read more...]

Report From Australia

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SPECIAL AUSTRALIAN ASSET CLASS REVIEW     I am writing this report on the ferry boat from Sydney to Manley, where I will attend a gathering of Australia based hedge fund managers to absorb their collective wisdom. I have deliberately taken the slow boat,  so I have the time to give this report the depth it deserves. The Australian swim suit model sitting … [Read more...]

Testimonial

man

Hello John. I`d like to subscribe to your Macro Millionaire program. I`m sure glad I found you as your suggestions have been gloriously FANTASTIC! Short the long bond-WOW. Appreciatively, John Memphis, Tennessee … [Read more...]

Why I Covered My Euro Short

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I am taking my profit in the Euro (FXE) December $140 puts this morning, nailing the high of the day at $5.70, and clocking a stunning three day profit of 107%. This adds 5.63% to the year-to-date return for Macro Millionaire, taking us up to 46%. Non option players who bought the short Euro ETF (EUO) made 9.5%. My net profit on the trade was $2.95. For the model $100,000 … [Read more...]

Watch Out for the Chihuahua Glut

paris

Yesterday, I wrote about the Nevadan wrinkle in the housing crisis where distressed homeowners are letting their horses go wild to make their mortgage payment. Now neighboring California is facing a Chihuahua glut, where evicted homeowners are handing over their pets to animal shelters. The diminutive Mexican canine enjoyed a boom in popularity in recent years, thanks to movies … [Read more...]

Meet the New Website

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Thanks to the thousands of new subscribers that have poured into this service in recent months, I have been able to complete a major upgrade of my website at www.madhedgefundtrader.com . Now that the daily traffic is reaching astronomical proportions, it is time to join the big league of online financial services with an industrial strength website. The new site offers … [Read more...]

November 2, 2011 – Quote of the Day

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“Now, you are starting to see people front run hedge fund books. People are front running John Paulson’s book. Everybody can see this. People are starting to line up the ducks and ask which hedge funds are going to have redemptions. Which position should I get in front of? Gold is a big problem in that environment. Guess what? The biggest position in the hedge fund community is … [Read more...]

A Day in the Life of the Mad Hedge Fund Trader

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Diary Entry for Monday, October 31, 2011 Dear Diary, 4:30 PM Sunday- Looks like my Monday is going to start early this week. The head of the foreign exchange desk at one of Japan’s largest banks called and told me that the Bank of Japan was hitting all bids for the yen in any size at the Monday morning opening in Tokyo, heralding the beginning of a major intervention … [Read more...]

Trade Alert – (FXE) November 1, 2011

slider-05-trader-alert

As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. … [Read more...]