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. Read more
Global Market Comments
May 4, 2015
Fiat Lux
Featured Trade:
(FRIDAY, MAY 15 SAN FRANCISCO STRATEGY LUNCHEON)
(I?M OFF TO THE LAS VEGAS SALT CONFERENCE),
(CATCHING THE MAYWEATHER/PACQUIAO FIGHT)
Fights certainly attract a different kind of crowd than, say, the Opera, the Chicago Art Institute or the PTA.
This I was reminded of on Saturday while checking in to catch my flight from the Windy City to Las Vegas to catch the Mayweather/Pacquiao fight for the welterweight championship of the world.
?Glam? was definitely the order of the day, with the men drenched in bling and wearing black baseball caps sideways, and the women wearing ultra short shorts that went half way up their rear end.
Standing there in my tailored Brioni suit, I stood out like a sore thumb.
Boxing is such a barbaric sport that I keep expecting it to get banned, or at least go out of fashion. Look at poor Muhammad Ali, whose career imprisoned him in a pitiful life of permanent brain damage.
And today?s champions are anything but role models. Mayweather himself has been arrested on multiple occasions for beating wives and girlfriends, and intimidates his own kids.
But the money is bigger than ever. With a $300 million purse, over $1 billion in pay-per-view tickets sold, and all the media hype, it is clear that is not going to happen any time soon.
I come from a long line of boxers. Both my father and my uncle fought in the Golden Gloves during the Great Depression. I grew up watching the great fights of Sonny Liston and Ali on a fuzzy, 17 inch black and white TV.
I also have some experience myself, participating at the National Karate Championships in Japan, where my front teeth still reside. Suffice it to say, I know how to throw a punch, and take one too.
So I go to one of these marquee events about once a decade, more for the atmosphere than the pugilism.
The last time I went, it was to see one of Mike Tyson?s last fights, against Lennox Lewis at the Pyramid Arena in Memphis in 2002. Tyson could barely stand up, and essentially danced with Lewis, who was six inches taller than him, for the entire fight.
But then, it was the actress, Cybil Shepard, who invited me to her hometown event, accommodations included in a mansion on top of the levee, and who was I to say no?
But I digress.
When I landed in Vegas, the weather was perfect, and the atmosphere electric.
Taxiing in to the terminal, I noticed the FBO parking was packed with over 100 private jets of every description. I later heard that nearby Henderson Field, where I keep my own plane, was also full to capacity.
The entire Strip was gridlocked, and I could only get into the Bellagio Hotel through the back entrance. From there, I had to cross the street to get to the MGM, wading through a crowd of spectators who behaved like they were at the Mardi Gras.
Even before the fight started, there was a dull roar, the crowd was so whipped up with anticipation. You could barely have a conversation with the person sitting next to you.
I was in the cheap seats, which cost only $1,000, a bargain, compared to the average ticket price of $11,000.
Everyone was celebrity spotting. Who could miss Michael Jordan, some 6,?6?, his bodyguards keeping adoring fans at bay? I think I caught a glance of Robert De Nero and Mark Wahlberg through the thick blue haze of cigar smoke.
By the second round, it was clear that Mayweather was going to win. He played it safe, keeping his distance and countering instead of attacking. When he won on points after 12 rounds the fans booed.
Basically, it was a boring fight.
It was a good day for me, as I had bet on both Mayweather and American Pharaoh, this afternoon?s winner of the Kentucky Derby (great pick, Nancy!).
It was definitely a day to buy ?American.?
Not What It Used to Be
?Sitting tight is seldom recommended by Wall Street. Don?t ask the barber whether you need a haircut,? said Oracle of Omaha, Warren Buffet.
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. Read more
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
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
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. Read more
Global Market Comments
May 1, 2015
Fiat Lux
Featured Trade:
(JUNE 22 WASHINGTON DC GLOBAL STRATEGY LUNCHEON)
(CASHING IN ON FREEPORT MCMORAN),
(FCX), (USO), (CU), (FM.TO), (ANTO.L),
(BUY FLOOD INSRANCE WITH THE VIX),
?(VIX), (VXX), (UVXY),
(TESTIMONIAL)
Freeport-McMoRan Inc. (FCX)
United States Oil ETF (USO)
First Trust ISE Global Copper ETF (CU)
First Quantum Minerals Ltd. (FM.TO)
Antofagasta plc (ANTO.L)
VOLATILITY S&P 500 (^VIX)
iPath S&P 500 VIX ST Futures ETN (VXX)
ProShares Ultra VIX Short-Term Futures (UVXY)
I am writing this to you from Terminal 2 at San Francisco Airport, awaiting my Virgin America flight to Chicago.
My conclusion so far is that the beef curry rice at the Japanese fast food joint Wakaba isn?t what it used to be. The meat is paper thin and full of fat and gristle. I guess everyone is trying to cut costs these days.
I saw a tall blond hustle by in a pilot?s uniform, and thought I recognized her behind as that of my former flight instructor from decades ago. But when I caught up with her, I learned she worked for American Airlines. Emmy flew for United. And I was off by a generation on the age.
That?s the problem with reaching Medicare age. You can?t see worth a damn, and all of your friends are dead. At least the landings are exciting when I am the pilot.
There?s nothing like getting in on the ground floor of a raging bull market in commodities to get your juices flowing, even for a senior citizen.
That?s what I did when I jumped into the Freeport McMoRan (FCX) May, 2015 $17-$18 deep in-the-money vertical call spread two weeks ago. This is the second time in a month I have coined it with this name, the world?s largest producer of copper.
Since (FCX) began its torrid move in mid April, the shares have added an eye popping $6, or 35%. That?s a winner and a half.
Many thanks to my many subscribers who work at Freeport, although I assure you, you had absolutely nothing to do with the recent move in your stock.
This is despite the fact that prices for the red metal (CU) have remained virtually unchanged during this period.
Instead, there is a parade of people I wish to thank for the success of this trade.
First, I have to tip my hat to Federal Reserve Chairman, Janet Yellen, for making it abundantly clear to me on countless occasions that she has absolutely no intention of raising interest rates this year. This has knocked the wind out of the greenback, forced a 5% correction, and given newfound strength to commodity stocks like (FCX).
Hey, Janet, call me!
I also want to thank the government in Beijing for the assist, which announced a major program to stimulate the Chinese economy right after I strapped on this trade, through the reduction of bank reserve requirements from 18.5% to 17.5%.
China is the world?s largest consumer of copper, and a stronger economy consumes more of the stuff, boosting prices northward.
I owe you all a Peking duck dinner for this one. Might I suggest the Da Dong Roast Duck Restaurant on Dongsi on the 10th Alley in Beijing? They?re supposed to be the best in town.
Finally, one can?t ignore the contribution of the Houthi rebels in Yemen for inspiring a sharp rally in the price of crude oil (USO), which helped drag up the price of other commodity stocks as well, including those producing copper.
For you I owe a round of falafels and cooked sheep?s eyes, favorites of yours, I know. However, I?ll have to mail this one in, lest a CIA Predator drone strike take me out over dinner.
You can sell this vertical bull call spread anywhere around the $0.99 and lock in 92% of the potential profit in this trade. Or you can run it until the May 15 expiration, ten trading days away, and collect the last penny or two.
Either way, it?s time to declare victory on this one and move on to the next one.
The spread clocked a gain in 12.5% in two weeks. That is on top of the one day 22.5% wonder we earned with the Freeport McMoRan (FCX) May, 2015 $16-$17 deep in-the-money vertical call spread.
When it rains, it pours.
If instead of buying the (FCX) call spread, you purchased the shares outright, the First Trist ISE Global Copper ETF (CU), First Quantum Minerals Ltd. (FM.TO), Antofagasta (ANTO.L), hang on. We are going much higher.
The 200-day moving average beckons at $26.33. And if the Chinese economic recovery is real, as the stock market there seems to think, you can easily double that target.
I have a feeling that Freeport McMoRan is my new rich uncle, cutting me generous maintenance checks every month.
So I?ll be looking to roll back into the next set of strike prices higher up and a maturity farther out at the next dip in the stock.
See you There Beijing