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
May 2, 2014
Fiat Lux
Featured Trade:
(JUNE 23 LONDON STRATEGY LUNCHEON)
(APRIL 23 GLOBAL STRATEGY WEBINAR),
(COME TO THE JUNE 13-14 INVEST LIKE A MONSTER LAS VEGAS CONFERENCE),
(SCAM OF THE MONTH)
Please come to hear me, Mad Hedge Fund Trader John Thomas, as the keynote speaker at the Invest Like a Monster Las Vegas Conference on June 13-14.
I will be joined by many old friends from across the investment spectrum. Jon and Pete Najarian will teach you the tricks of the trade for navigating the ever complex options markets.
Fellow former combat pilot, Chuck Hughes, will go into depth on his own highly successful approach to trading the market. To listen to my in depth interview with him on Hedge Fund Radio, please click here.
Well known market commentator Guy Adami, the Prince of New Jersey, will be there to give his trading insights. So will former hedge fund manager and Yahoo Finance guru Jeff Macke.
The first day will be devoted to three educational sessions that get into the nitty gritty of trading options. The day winds up with a cocktail party with the Najarian Brothers and me.
I will kick off the Saturday session with and extended presentation on the long-term future of the financial markets, to be followed by an extensive question and answer session. I will be followed by an impressive lineup of market veterans.
The event will be held at the Bellagio Hotel on the Strip, my favorite Las Vegas haunt, best known for its spectacular water fountains out front. You may recognize it in the hit movies The Hangover and Ocean?s Eleven.
General admission costs $499 for the two full days. You can buy a VIP ticket for $699, which includes social events with the high and the mighty. It is all great value for the money, given the quality and quantity of the information you will obtain. Just click here: http://www.optionmonster.com/events/?refId=186 to buy tickets.
Trademonster?s proprietary program, called Heat Seeker ?, 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, every 33 minutes.
The 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. The firm then distills this ocean of data into the top movers of the day, which is put up for free on its website, and offers much more detailed analysis through a premium subscription product.
?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 peak 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 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.
June is a great time to visit Sin City, as the crowds are largely gone and the sun is wonderfully baking hot. You can ride the neck-breaking roller coaster at the New York New York Hotel, catch one of eight Cirque du Soleil shows, and ride a gondola at the Venetian Hotel.
Or you can try to get a great deal on a luxury item from my buddy, Rick Harrison, at the famous Gold and Silver Pawn, of Pawn Stars fame (good luck with that!).
Just be sure to bring extra sun tan lotion!
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
May 1, 2014
Fiat Lux
Featured Trade:
(LAS VEGAS WEDNESDAY, MAY 14 GLOBAL STRAGEGY LUNCHEON)
(MY MEA CULPA ON THE MARKETS),
(AN ENVIRONMENTAL ACTIVISTS TAKE ON THE MARKETS),
(DBA), (MOO), (PHO), (FIW)
PowerShares DB Agriculture (DBA)
Market Vectors Agribusiness ETF (MOO)
PowerShares Water Resources (PHO)
First Trust ISE Water Idx (FIW)
When the market let?s you out with a nice profit ahead of two major risk events, you take it. We have 64% of the potential profit in the S&P 500 (SPY) May, 2014 $192-$195 in-the-money bear put spread at today?s prices.
We have an important Federal Reserve meeting where they are expected to announce Taper IV, cutting their monthly bond buying to only $45 billion. The Fed is almost certainly going to take a hard look at the slowing real estate market (see yesterday?s letter).
Yesterday was also the end of the month, so you could expect the usual fun and games at the close as fund managers window dress. On Friday, we get the April nonfarm payroll, which could be anywhere. Go toss a coin.
The cruel lesson of the past two months has been to take profits quickly, to take the money and run. So, let?s do so.
If our remaining (TLT) put spread expires at its maximum value, and we get the (VXX) back up to cost, then the model trading portfolio will be up 13% on the year. I have had to work three times harder to make that 13% than I did to earn last year?s blowout 68% profit. It seems like every time I punch through to a new performance all time high, an invisible hand pushes me back down again.
I warned readers many time in 2013 that the market was sucking performance out of 2014 and bringing it forward into 2013. That is exactly what has happened. Almost all managers are down this year, and many hedge funds are getting crushed in these whippy, volatile conditions.
The last two months have been especially difficult. The ranges have been so narrow that it has been hard for anyone to make money. In technical terms, outside reversal days to the downside are then frequently followed by outside reversal days to the upside. This is a traditional trader?s worse nightmare. Only the high frequency traders are laughing their way to the bank.
If this sounds like a mea culpa, it is. Last year I delivered a mind blowing 17 consecutive profitable Trade Alerts, suffered a couple losses, then wracked up another 15 winners. I lulled people into thinking that making money in the stock market was easy. News flash: It?s not easy. You can earn profits, but only after the expenditure of much blood, sweat, and tears. Windfalls out of the blue only happen in the movies (loved Trading Places).
The goal here is to stay small, nimble, and still standing when trading gets easier in the second half, as it inevitably will. No one ever said trading was fair or easy. That?s show business.
