(NOVEMBER 20 GLOBAL STRATEGY WEBINAR), (MAD HEDGE FUND TRADER MELTS UP TO 56% 2013 PERFORMANCE), (SPY), (IWM), (FXA), (TLT), (AAPL), (XLI), (C), (THE YEN IS DEAD MEAT), (FXY), (YCS), (DXJ), (TM), (SELLING BONDS AGAIN), (TLT), (TBT)
SPDR S&P 500 (SPY)
iShares Russell 2000 (IWM)
CurrencyShares Australian Dollar Trust (FXA)
iShares 20+ Year Treasury Bond (TLT)
Apple Inc. (AAPL)
Industrial Select Sector SPDR (XLI)
Citigroup, Inc. (C)
CurrencyShares Japanese Yen Trust (FXY)
ProShares UltraShort Yen (YCS)
WisdomTree Japan Hedged Equity (DXJ)
Toyota Motor Corporation (TM)
ProShares UltraShort 20+ Year Treasury (TBT)
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Last week, I begged you, pleaded with you, and even pounded the table to get you to increase your shorts in the Japanese yen (FXY), (YCS), and longs in the Japanese stock market (DXJ). I was certain that Japan?s beleaguered currency was about to break out of its tedious six month trading range and plumb new lows.
I turned out to be dead right.
My argument was that with the economy slowing, and Prime Minister Shinso Abe?s ?third arrow? economic reforms mired in the political muck, the Bank of Japan would have little choice but to accelerate its quantitative easing program. This would be terrible news for the yen and great news for stocks (DXJ), not just in Japan, but everywhere.
It turns out that while politicians are dithering, the central bank has little choice but to over stimulate on the monetary side to compensate. Haven?t I heard this story somewhere else before?
Take a look at the charts below, put together by my friends at Stockcharts.com. The (FXY)/(DXJ) inverse relationship is almost perfect. This is because a falling yen causes the profits of Japanese exports to rocket when they are translated back into their home currency. Look no further that Toyota?s (TM) fabulous 70% YOY profit gain.
Both charts are showing a major breakout for extended continuation triangles. The yen is telling you to load up on stocks, while stocks are telling you to sell the hell out of the yen. I say do both. In the global macro world it doesn?t get any easier than this.
However, regarding the Currency Shares Japanese Yen Trust (FXY) December, 2013 $102-$105 in-the-money bear put spreadwe already have on board, we have already sucked this position dry. At today?s prices, we can realize 87% of its maximum potential profit, and that is still with more than a month to go to expiration. The risk/reward has swung against us, and it is not worth hanging on for the extra 13%.
Give me a yen rally to sell into, and I will be back into this position in a heartbeat, as I have already done with bonds (TLT).
The Yen is Dead Meat
https://www.madhedgefundtrader.com/wp-content/uploads/2013/11/Ninja.jpg375453Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2013-11-18 01:04:442013-11-18 01:04:44The Yen is Dead Meat
You all know well my antipathy to the bond market, which I believe hit a 60-year peak on August 18, 2012 at 10:32 AM EST. I managed to catch the exact top of the one-month post taper bond market rally, and sent the Trade Alerts to sell bonds showering upon you. I quickly closed all of those out for nice profits.
We have since seen a $2.24 dead cat bounce in the (TLT) that took the yield on the ten year Treasury bond back down to 2.68%, off of the recent 2.77% top. That is enough for me to sell into.
Take a look at the chart below, and you will see that we are probably setting up an interim head and shoulders top that presages much larger moves lower to come.
The rocket fuel for this break will be the yearend selling where money managers attempt to minimize their bond exposure that appears in their annual reports so as not to appear too stupid to their customers. Then we have the ?Great Reallocation? trade out of bonds into stocks, which should get some real legs in 2014.
This all promises to take the (TLT) down from today?s $104.51 to $98 or lower over the next six months. If I am wrong on this, then we should hit major resistance for the (TLT) on the upside at $106.80, where you would expect the right shoulder formation to begin that will carry us safely into the December 20 expiration. This could be the trade that keeps on giving.
If you can?t do the options, you can buy the ProShares Ultra Short 20+ Year Treasury leveraged short ETF (TBT) on the dip. My very long-term target for this baby is $200, up from today?s $76.70.
Bonds Have Suddenly Become Unloved
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?A high stock price is somewhat distracting,? said Tesla CEO, ElonMusk.
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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
https://www.madhedgefundtrader.com/wp-content/uploads/2013/03/Alert.jpg259294Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2013-11-15 17:41:552013-11-15 17:41:55Trade Alert - (SPY) November 15, 2013
The Trade Alert service of the Mad Hedge Fund Trader has posted yet another new all time high in performance, taking in 51.13%. The November month to date record is now an enviable 6.67%.
The three-year return is an eye popping 106.18%, compared to a far more modest increase for the Dow Average during the same period of only 20.3%.
That brings my averaged annualized return up to 36.4%.
This has been the highest profit since my groundbreaking trade mentoring service was launched 35 months ago. These numbers place me at the absolute pinnacle of all hedge fund managers, where the year to date gains have been a far more pedestrian 3%. I predict the arrival of a lot more job seekers on Craig?s List in January.
These numbers come off the back of another blistering week in the market where I added 5.13% in value to my model-trading portfolio.
I took profits on all of my extensive shorts in the Treasury bond market, taking advantage of the sudden back up in ten-year yields from 2.47% to 2.77%, the sharpest move of the year.
I then bet that the stock market would continue another tedious sideways correction going into the Thanksgiving holidays. I bought an in the money put spread on the S&P 500, and then bracketed the index through buying an in the money call spread.
When the market took a swan dive on Thursday, my short position then protected my P&L from undo volatility. I accomplished the same with a second short position in the Russell 2000 (IWM). I then took advantage of the weakness to add another long in the Industrials ETF (XLI), a rifle short at one of the best performing sectors of the market.
This is how the pros do it, and you can too, if you wish.
Carving out the 2013 trades alone, 61 out of 72 have made money, a success rate of 85%. It is a track record that most big hedge funds would kill for.
My esteemed colleague, Mad Day Trader Jim Parker, has also been coining it. He caught a spike up in the volatility index (VIX) by both lapels. He also was a major player on the short side in bonds, to the delight of his many followers. By the way, Jim will be following up with another educational webinar on How to Trade this coming Wednesday, and you should receive email invitations for this shortly.
The coming winter promises to deliver a harvest of new trading opportunities. The big driver will be a global synchronized recovery that promises to drive markets into the stratosphere in 2014. The Trade Alerts should be coming hot and heavy. Please join me on the gravy train.
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. Upgrade to Global Trading Dispatch PRO and you will also receive Jim Parker?s Mad Day Trader service.
To subscribe, please go to my website at www.madhedgefundtrader.com, find the ?Global Trading Dispatch? box on the right, and click on the lime green ?SUBSCRIBE NOW? button.
Mad Day Trader Jim Parker
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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
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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
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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
00Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2013-11-15 12:43:592013-11-15 12:43:59Trade Alert - (TLT) November 15, 2013
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.
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