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
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
Global Market Comments
September 25, 2013
Fiat Lux
Featured Trade:
(MAD HEDGE FUND TRADER HITS THREE YEAR 100% GAIN),
(JOIN THE INVEST LIKE A MONSTER SAN FRANCISCO TRADING CONFERENCE),
(WHY I?M BUYING THE TREASURY BOND MARKET),
(TLT), (TBT)
iShares Barclays 20+ Year Treas Bond (TLT)
ProShares UltraShort 20+ Year Treasury (TBT)
I am pleased to announce that I will be participating in the Invest Like a Monster Trading Conference in San Francisco during October 25-26. The two-day event brings together experts from across the financial landscape who will improve your understanding of markets by a quantum leap and measurably boost your own personal trading performance.
Tickets are available for a bargain $399. If you buy the premium $499 package you will be invited to the Friday 6:00 pm VIP cocktail reception, where you will meet luminaries from the trading world, such as Trademonster?s Jon and Pete Najarian, Guy Adami, Jeff Mackey, and of course, myself, John Thomas, the Mad Hedge Fund Trader. All in all, it is great value for the money, and I?ll personally throw in a ride on the City by the Bay?s storied cable cars for free.
Jon Najarian is the founder of OptionMonster, which offers clients a series of custom crafted computer algorithms that give a crucial edge when trading the market. Called Heat Seeker ?, it monitors no less than 180,000 trades a second to give an early warning of large trades that are about to hit the stock, options, and futures markets.
To give you an idea of how much data this is, think of downloading the entire contents of the Library of Congress, about 20 terabytes of data, every 30 minutes. His firm maintains a 10 gigabyte per second conduit that transfers data at 6,000 times the speed of a T-1 line, the fastest such pipe in the civilian world. Jon?s team then distills this ocean of data on his website into the top movers of the day. ?As with the NFL,? says Jon, ?you can?t defend against speed.?
The system catches big hedge funds, pension funds, and mutual funds shifting large positions, giving subscribers a peek at the bullish or bearish tilt of the market. It also offers accurate predictions of imminent moves in single stock and index volatility.
Jon started his career as a linebacker for the Chicago Bears, and I can personally attest that he still has a handshake that?s like a steel vice grip. Maybe it was his brute strength that enabled him to work as a pit trader on the Chicago Board of Options Exchange for 22 years, where he was known by his floor call letters of ?DRJ.? He formed Mercury Trading in 1989 and then sold it to the mega hedge fund, Citadel, in 2004.
Jon developed his patented algorithms for Heat Seeker? with his brother Pete, another NFL player (Tampa Bay Buccaneers and the Minnesota Vikings), who like Jon, is a regular face in the financial media.
In order to register for the conference, please click here. There you will find the conference agenda, bios of the speakers, and a picture of my own ugly mug. I look forward to seeing you there.
Cling! Cling!
Jon Najarian
The Fed?s decision not to taper, and therefore keep interest rates lower for longer, gave a great flashing green light to the bond market. It has been off to the races ever since, with the iShares Barclays 20+ Year Treasury Bond Fund (TLT) blasting through resistance this morning to new two month high. As this is off a double bottom on the charts that has been unfolding since July, the move looks pretty solid.
With the imminent appointment of my friend, Janet Yellen, as the next chairman of the Federal Reserve, I think we may not see a real taper until well into 2014. I heard yesterday that the White House staff has been ordered to start talking her up, now that their favorite, Larry Summers, has been sent to an assisted living facility.
So bonds have more to run, easily taking the yield on ten year Treasuries from this morning?s 2.70% down to 2.50%. There, we may stall out and define the lower end of the new range for bond yields for quite some time.
I have been begging, pleading with, and cajoling readers for the past month to take profits in their short bond positions and sell their holding in the ProShares Ultra Short 20+ Year Treasury ETF (TBT). If they did, they are nicely positioned to buy it back the next time it hits $70, down from the recent $82 peak. That is roughly where we hit the 2.50% ten-year yield.
That could be the bond trader?s lot for the next six months, buying paper every time we hit a 3% yield, and going short at the 2.50% yield. They deserve nothing less. If they had real balls, they?d be stock traders.
Keep in mind that this is a counter trend trade, which are always dangerous. I am convinced that we are now 13 months into the Great Bear Market for bonds that could last another 20 years. Future capital flows will be defined by moving out of bonds into stocks probably until the end of the 2020?s, the so called ?Great Rotation.? So I am being careful here, keeping maturities short at a little more than three weeks, the size small, and the strikes distant.
This is not my best-timed trade of the year, and I am a little late to the party. I am resorting to finishing off the left over drinks abandoned by the early arrivals. As has lately so often been the case, prices turn on a dime, and then don?t let anyone in, as there are no pullbacks. This is a sign of a market dominated by professional momentum traders, not stay at home day traders.
So the potential profit on this trade is only a modest $630, or 0.63% for the model $100,000 trading portfolio. The risk is small, and therefore, so is the payoff. If this doesn?t appeal, or if the commissions end up eating too much of your potential profit, just walk away. Or, you could wait for better prices with a pullback in the (TLT) to get the better return. Or, just watch it play out in the paper portfolio as a training exercise.
The attraction of this position is that it gives us a participation in the unfolding, politically driven smack down in Washington over the debt ceiling crisis. It also establishes a ?RISK OFF? position, which I can use to counterbalance my existing ?RISK ON? positions.
It?s always nice to have a hedge on in case the wheels fall off the market.
Always Nice to Have a Hedge On?The Fed is not worried about inflation in the next few years and want growth first, growth second, and growth third. With the stabilization of Europe, the apparent pick up in China, and a US economy still on a reasonable footing, the Fed?s heavy leaning to a growth policy should lead to a pretty favorable environment for the markets,? said legendary hedge fund manager, David Tepper, of Appaloosa Management.
The Trade Alert service of the Mad Hedge Fund Trader has posted a year-to-date gain of 43.24%, a new all time high. Performance since inception 33 months ago soared to 98.29%. This pegs the average annualized return at 35.7%, putting me in the absolute top tier of all hedge fund managers.
These numbers come off the back of a blistering September month to date of up +5.66%. Some 72% of all Trade Alerts since the beginning have been profitable. Carving out the closed 2013 trades alone, 42 out of 51 have made money, a success rate of 82%. In addition, we are carrying six open trades, which are profitable. It is a track record that most big hedge funds would kill for.
This performance was only made possible by correctly calling the near term direction of stocks, bonds, foreign currencies, energy, precious metals and the agricultural products. This may sound easy, until you try it. Some retirement!
My big win this month has been my major short position in the Japanese yen (FXY), (YCS), which is probing new lows against the dollar as we speak. The Japan win on hosting the 2020 Olympics gave the beleaguered Japanese currency some extra downside momentum. The yen has already collapsed in the crosses, and a further major breakdown against the dollar is imminent.
We really coined it on a short position in the Euro (FXE), coming out near the bottom. A new position in copper producer, Freeport McMoRan (FCX), become immediately profitable, jumping some 5% after the Trade Alert went out. I jumped at the $60 selloff in Apple shares in the wake of their latest product launch, instantly, moving into the green with this holding as well. The same is true for my long in the Australian dollar (FXA).
Only my oil short left me with a hickey, which I stopped out of, thanks to the Syria gas attack. Still, if I had held it for only two more hours it would have made money when the Russian peace initiative for Syria was announced. Risk control is paramount if you want to swing for the fences. Welcome to show business.
The coming autumn promises to deliver a harvest of new trading opportunities. On the menu are the taper, a new Fed governor, a debt ceiling crisis, a possible war with Syria, and the death of the bull market in bonds. The Trade Alerts should be coming hot and heavy.
Global Trading Dispatch, my highly innovative and successful trade-mentoring program, earned a net return for readers of 40.17% in 2011 and 14.87% in 2012. The service includes my Trade Alert Service and my daily newsletter, the Diary of a Mad Hedge Fund Trader. You also get a real-time trading portfolio, an enormous trading idea database, and live biweekly strategy webinars, Global Trading Dispatch PRO adds Jim Parker?s Mad Day Trader service to the mix.
To subscribe, please go to my website: ?www.madhedgefundtrader.com, find the ?Global Trading Dispatch? box on the right, and click on the lime green ?SUBSCRIBE NOW? button.
Some Retirement!While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.