?You want to rotate your money into the sectors where Donald Trump?s policies are potentially going to work: those are financials, health care, and industrials?. said Erin Browne, head of macro investing at UBS O?Connor.
When a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what security to buy, 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.
While the Global Trading Dispatch focuses on investment over a one week to six-month time frame, Mad Options Trader, provided by Matt Buckley, will focus primarily on the weekly US equity options expirations, with the goal of making profits at all times. 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 Bill Davis, 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
November 14, 2016
Fiat Lux
Special New World Order Issue
Featured Trade:
(TRUMP?S GIFT TO TRADERS),
(SPY), (TLT), (TBT), (GLD), (USO), (CAT),
?(X), (FCX), (BAC), (GS), (LEN), (ITB)
SPDR S&P 500 ETF (SPY)
iShares 20+ Year Treasury Bond (TLT)
ProShares UltraShort 20+ Year Treasury (TBT)
SPDR Gold Shares (GLD)
United States Oil (USO)
Caterpillar Inc. (CAT)
United States Steel Corp. (X)
Freeport-McMoRan Inc. (FCX)
Bank of America Corporation (BAC)
The Goldman Sachs Group, Inc. (GS)
Lennar Corporation (LEN)
iShares US Home Construction (ITB)
In 50 years of trading, I have never seen markets turn on a dime as they did last week. As a result, they have created some of the best trading opportunities of the century.
The sector rotation has been fast and furious. And trading volumes across all asset classes exploded to their highest levels in years.
Of course, they were responding to the biggest election upset in history which flipped the direction of the global economy 180 degrees in a heartbeat.
I am suddenly reminded of economist John Maynard Keynes' famous quote: "When the facts change, I change my mind. What do you do, sir"?
My ancestors hailed from Missouri, before they moved to California during the 1849 gold rush. Their black and white tintypes adorn the walls of my Lake Tahoe estate.
Every time I cross Donner Pass on Interstate 80, I remember their gaunt grim faces.
And you know what the motto of the state Missouri is?
SHOW ME!
Incredible as it may seem, I am already in touch with several senior officials of the Trump administration, thanks to my ancient Wall Street ties.
That will give me an early read on which Trump policies are campaign fluff, which will be seriously watered down, and the few that will actually be implemented.
AS EVERYONE IN THE FINANCIAL MARKETS KNOWS, THIS IT TRADING GOLD!
Early indications are that the incoming economic policies will be Reagan 2.0.
I remember well the jovial, backslapping president, who served from 1982-1990. I knew him too well for 25 years.
For three decades, he campaigned from the far right, championing McCarthyism, bemoaning Rowe versus Wade, demanding a balanced budget, and constantly warning of the communist threat.
The day he got into office he forgot all of this, negotiating huge arms reduction treaties with the Russians, and never lifting a finger to curtail women's rights.
We know how Reagan 1.0 ended. Thanks to large tax cuts and massive spending increases, the national debt skyrocketed 400%, from $1 trillion to $4 trillion. The bond market got killed.
And despite all his saber rattling on the campaign trail, Reagan never ensnared America in a single serious war.
Trump could well do the same. The big shock of the decade would be how fast Trump rushes to the middle.
But he has to "SHOW ME" first.
I am expecting a similar result with Reagan 2.0. Certainly the bond market thinks so, the ten-year Treasury yield adding a hair-raising 40 basis points in yield in a mere three days.
What we do know for sure is virtually the entire investment industry has been caught seriously wrong footed by the Trump win.
They were all, to a person, perfectly positioned for a Clinton win, and owned a heavily-weighted Clinton portfolio.
What they got was a Trump wild card.
IT WILL TAKE YEARS FOR INSTITUTIONS TO ROTATE SECTORS AND REPOSITION FOR THE NEW WORLD ORDER.
THIS IS NOTHING LESS THAN THE GREATEST GIFT TO TRADERS OF ALL TIME.
There is one great structural tailwind to this unbelievable sector rotation.
It takes you out of over owned, expensive sectors close to all time highs, like technology, that have been leading the market for most of this decade.
It moves you into under owned, cheap sectors, such as financials, heath care, commodities, and energy, that have been despised for years .
That's fine with me. I was getting tired of chasing technology for small incremental gains at the risk of gigantic one-day crashes, some four in the last 15 months.
You can make a lot more money buying stocks off of five-year bottoms than seven-year tops.
Maybe I can squeeze a few thousands basis points of performance out in 2016?
I have presented four Emergency Strategy Webinars for major hedge funds, clients, and the Online Trader's Summit in as many days.
Financial advisors tell me they are finding the points contained enormously helpful in explaining the New World Order to their clients.
So I am giving them to you in full below:
THE NEW WORLD ORDER:
Control of the Presidency, the House of Representatives, the Senate, and the Supreme Court mean the Republicans have a free hand
Republicans blocked fiscal spending for eight years, but will now move forward full steam ahead
$1 trillion in new infrastructure spending in the Midwest amounts to Quantitative Easing 5.0
Massive Keynesian stimulus could double US economic growth in the short term
Inflation will make an earlier return
It all adds up to a big RISK ON and BUY!
THE NEW BIG TRENDS:
OUT WITH THE NEW & IN WITH THE OLD
WINNERS:
Value
The Economy
Deregulation
Taxpayers
Domestic US Stocks
Defense Stocks
Inflation
Oil & Gas
Commodity Stocks
Bridges and Freeways
The Midwest Rust Belt
The US Dollar
Savers
Homeowners
Cheap Stocks
THE NEW STOCK PLAYS:
Get These Right and You'll Retire Early
Caterpillar (CAT) - Infrastructure
US Steel (X) - Infrastructure
Nucor (NUE) - Steel
Pfizer (PFE) - Big Pharma
Ely Lily (LLY) - Big Pharma
Lockheed Martin (LMT) - Defense
Freeport-McMoRan (FCX) - Commodities
Exxon Mobil (XOM) - Big Oil
Occidental Petroleum (OXY) - Energy
Bank of America (BAC) - Financials
Goldman Sachs (GS) - Financials
Lennar Homes (LEN) - Homebuilding
LOSERS:
Growth
Globalization
Regulation
Multinational Stocks
Telecom and Utilities
Emerging Markets
The Budget Deficit
Solar Energy
Bonds
Yield Plays
The Euro
The Japanese Yen
Borrowers
Renters
Expensive Stocks
THE OLD STOCK PLAYS:
Time to Say "Thank You Very Much" and Unload:
Alphabet (GOOG) - Technology
Apple (AAPL) - Technology
Facebook (FB) -Technology
Amazon (AMZN) - Technology
Tesl
a (TSLA) - Electric Cars
First Solar (FSLR) - Solar Panels
Sun Power (SPWR) - Solar Panels
General Motors (GM) - Globalization
AT&T (T) - Telecommunications
Mexico (EWW) - Mexico ETF
China (FXI) - China ETF
Euro (FXE) - Euro ETF
Yen (FXY) - Yen ETF
Gold (GLD) - Gold
THE BOND MARKET: THE FAT LADY IS SINGING:
Sell Short every Five Point Rally in the 20+ Year Treasury Bond ETF (TLT) for the next Ten Years
Bonds are Toast
The first fiscal stimulus in eight years will pour $1 trillion into infrastructure spending
Taxes will be cut across the board, concentrated for the wealthy and business
Replenishing of the military adds further spending demands
All of this adds $10 trillion to the national debt in eight years
Throw in a new war and that doubles it to $20 trillion
Is a replay of the 400% rise in national debt under Reagan during 1982-1990, when Treasury bond yields hit 12%
Interest rates will rocket
Buy the Ultrashort 20+ Year Treasury Bond ETF (TBT)
FOREIGN CURRENCIES: DOLLAR RALLY CONTINUES
Rising interest rates have the US dollar rocketing against all other currencies
Interest rate differentials are the biggest driver of foreign exchange rates
Buy the US Dollar Index ETF (UUP), calls, call spreads, and futures on dips
Yen fundamentals are as bad as ever, the Japanese will be the last to raise interest rates, if ever, expect a long-term decline, sell short Japanese Yen Trust (FXY), or buy the Ultrashort Yen (YCS)
Future of Euro is dependent on whether or not the EC breaks up
ENERGY: THE DOUBLE-EDGED SWORD
Stronger economy is oil positive
But a trade war with China, the world's largest new marginal consumer, could cause demand to slow there
Any run up to $60 will see new US fracking production pour into the market
Sell rallies up to $52, buy dips to $40
PRECIOUS METALS: TRUMPED!
Spiking interest rates are hugely negative for gold (GLD)
Current selloff creates a great entry point for long term investors
When inflation really shows up, that is when you want to pile back into gold
China and emerging nations have to buy several thousand tonnes to bring their holdings up to western level
Should take prices from $1,250 to $5,000 an ounce in 15 years
REAL ESTATE: A 20-YEAR BOOM
Millennial demographic wave is about to drive US home prices northward for the next 20 years
Only 2.4 million homes are for sale, down -6.8% YOY, creating a severe shortage; normally, homes for sale rise in the fall which predicts a very hot market in the spring
US home building is proceeding at less than half the peaks seen in the 2000s, despite rapidly rising demand, creating a structural shortage
Home equity has been the top-performing, individually owned asset class for the past 5 years
All this makes homebuilders a big long term ?BUY?
TRADE SHEET:? SO WHAT DO WE DO ABOUT ALL THIS?
Stocks- Buy
Bonds-Sell
Commodities-Buy
Currencies- Sell
Precious Metals ?Buy
Real Estate-Buy
The Only Audited Trading Performance Online
?Average Annual Return +37.18%
Major Stimulus with Jobless Claims at a 43-Year Low? Hugely Inflationary
What a Difference a Day Makes!
Oops!
THE NEW WORLD ORDER
?Managing money is going to be fun over the next six months.? said Jeffrey Gundlach of Double Line, on the surprise Trump election win.
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 Bill Davis, 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
November 11, 2016
Fiat Lux
Featured Trade:
(A TRIBUTE TO A TRUE VETERAN)
So, I am taking a hard earned day off today.?
It is Veterans Day, and I?ll be putting on my faded Marine Corp fatigues, with gold railroad track bars on my shoulders, and leading the hometown parade. So, I thought it would be a good day to tell you the story of my Uncle Mitch.
Since job prospects for high school graduates in rural Pennsylvania in 1936 were poor, Mitch walked 200 miles to the nearest Marine Corp recruiting station in Baltimore.
After basic training, he spent five years rotating between duty in China and the Philippines, manning the fabled gunboats up the Yangtze River.
When WWII broke out, he was a seasoned sergeant in charge of a machine gun platoon. That put him with the seventh regiment of the First Marine division at Guadalcanal in October, 1942.
When the Japanese counterattacked, Mitch was put in charge of four Browning .30 caliber water-cooled machine guns and 33 men, dug in at trenches on a ridge above Henderson Field.
The Japanese launched massive waves of suicide attackers in a pouring tropical rainstorm all night long, frequently breaking through the line and engaging in fierce hand-to-hand combat.
If the position fell, the flank would have been broken, leading to a loss of the airfield, and possibly the entire battle. WWII would have lasted two more years.
After the first hour, all of Mitch's men were either dead or severely wounded, shot or slashed with samurai swords.
So Mitch fired one gun until it was empty, then scurried over to the next, and then the next. In between human waves, he ran back and reloaded all the guns.
To more easily pitch hand grenades, he cut the arms off his herringbone fatigues. When the Japanese launched their final assault, and then retreated, he picked up a 40-pound Browning and ran down the hill after them, firing all the way, and burning all the skin off his left forearm.
Mitch's commanding officer, Col. Herman H. Hanneken, heard the guns firing all night from the field below.
He was shocked when he visited the position the next morning, finding Mitch alone in front of a twisted sea of 1,000 Japanese bodies, not a scratch on him.
Henderson?s Ridge in 1942
The iconic fictional hero in the 1949 film, Sands of Iwo Jima, Sergeant John M. Striker, was modeled after Mitch.
Tradition dictated that all military officers salute Mitch, even five star generals, and he was given a seat to attend every presidential inauguration from FDR on.
When Mitch got older and infirm, I used my captain's rank to escort him on diplomatic missions overseas to attend important events, like the 40th anniversary of D-Day in Normandy.
Whenever Mitch was in town, he would join me for lunch with some of my clients with a history bent, and a more humble and self-effacing guy you never met.
When I get back from the parade, I'll take out the samurai sword Mitch captured on that fateful day, a 1692 Muneshige, the hilt still scarred with 30-caliber slugs, and give it a ritual polishing in sesame oil and powdered deer horn, as samurai have done for millennia.
To learn more about the First Marine Division's campaign during the war, please read the excellent paperback, The Island: A History of the First Marine Division on Guadalcanal?by Herbert Laing Merillat, which you can buy from Amazon by clicking on the title.
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