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Five Reasons Gold is Going to a New High

Gold has been one of the better-performing asset classes this year. And here’s the good news. It’s only just begun.

Cut US dollar interest rates the least, and the greenback takes a hit. That is major gold positive.

Trapped in a narrow trading range for three years, the yellow metal has suddenly become everyone’s favorite hedge.

Now that gold is back in fashion, how high can it really go?

The question begs your rapt attention, as a plethora of new positive fundamentals for the barbarous relic are making their way to the surface.

It turns out that gold is THE deflationary asset to own, and inflation has just fallen for ten consecutive months.

Who knew?

I was an unmitigated bear on the price of gold after it peaked in 2011. In recent years, the world has been obsessed with yields, chasing them up to historically high levels across all asset classes.

Websites purveying investment-grade coins and bars crashed multiple times, due to overwhelming demand. Some retailers have run out of stock.

So I’ll take this opportunity to review a short history of the gold market (GLD) for the young and the uninformed.

Since it last peaked in the summer of 2011 at $1,927 an ounce, the barbarous relic was beaten like the proverbial red-headed stepchild, dragging silver (SLV) down with it.

It faced a perfect storm.

Gold was traditionally sought after as an inflation hedge. But with economic growth weak, wages stagnant, and much work still being outsourced abroad, deflation became rampant.

The biggest buyers of gold in the world, the Indians, have seen their purchasing power drop by half, thanks to the collapse of the rupee against the US dollar. The government increased taxes on gold in order to staunch precious capital outflows.

Chart gold against the Shanghai index, and the similarity is striking, until negative interest rates became widespread in 2016.

In the meantime, the gold supply/demand balance was changing dramatically.

While no one was looking, the average price of gold production soared from $5 in 1920 to $1,400 today. Over the last 100 years, the price of producing gold has risen four times faster than the underlying metal.

It’s almost as if the gold mining industry is the only one in the world that sees real inflation, since costs soared at a 15% annual rate for the past five years.

This is a function of what I call “peak gold.” They’re not making it anymore. Miners are increasingly being driven to higher-risk, more expensive parts of the world to find the stuff.

You know those tires on heavy dump trucks? They now cost $200,000 each, and buyers face a three-year waiting list to buy one.

Newmont Mining (NEM), the world’s largest gold miner, didn’t try to mine gold at 15,000 feet in the Andes, where freezing water is a major problem, because they like the fresh air.

What this means is that when the spot price of gold fell below the cost of production, miners simply shut down their most marginal facilities, drying up supply. That has recently been happening on a large scale.

Newmont Mining, a client of the Mad Hedge Fund Trader, can still operate, as older mines carry costs that go all the way down to $600 an ounce.

No one is going to want to supply the sparkly stuff at a loss. So, the supply disappeared.

I am constantly barraged with emails from gold bugs who passionately argue that their beloved metal is trading at a tiny fraction of its true value, and that the barbaric relic is really worth $5,000, $10,000, or even $50,000 an ounce (GLD).

They claim the move in the yellow metal we are seeing now is only the beginning of a 30-fold rise in prices, similar to what we saw from 1972 to 1979, when it leapt from $32 to $950.

To match the gain seen since the 1936 monetary value peak of $35 an ounce, when the money supply was collapsing during the Great Depression, and the double top in 1979 when gold futures first tickled $950, this precious metal has to increase in value by 800% from the recent $1,050 low. That would take our barbarous relic friend up to $8,400 an ounce.

To match the move from the $35/ounce, 1972 low to the $950/ounce, 1979 top in absolute dollar terms, we need to see another 27.14 times move to $28,497/ounce.

Have I gotten your attention yet?

I am long-term bullish on gold, other precious metals, and virtually all commodities, for that matter. But I am not that bullish. These figures make my own $5,000/ounce long-term prediction positively wimp-like by comparison.

The seven-year spike up in prices we saw in the seventies, which found me in a very long line in Johannesburg, South Africa, to unload my own Krugerrands in 1979, was triggered by a number of one-off events that will never be repeated.

Some 40 years of unrequited demand were unleashed when Richard Nixon took the US off the gold standard and decriminalized private ownership in 1972. Inflation then peaked at around 20%. Newly enriched sellers of oil had a strong historical affinity with gold.

South Africa, the world’s largest gold producer, was then a boycotted international pariah and teetering on the edge of disaster. We are nowhere near the same geopolitical neighborhood today, and hence, my more subdued forecast.

But then again, I could be wrong.

You may have noticed that I have been playing gold from the long side recently since it bottomed in March. I’ll be back in there again, given a good low-risk, high-return entry point.

You’ll be the first to know when that happens.

As for the many investment advisor readers who have stayed long gold all along to hedge their clients’ other risk assets, good for you.

You’re finally learning!

The Market Outlook for the Week Ahead, or The Iran War and Your Portfolio

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If you are worried about the Israel-Iraq war causing a third oil shock and sending your portfolio to the junk yard, you can rest easy.

Only a few Israeli attacks targeted Iranian oil facilities. It helps that there is a global oil glut and widespread tax-subsidized overproduction. The Strait of Hormuz remains open, which I used to regularly fly over to watch the last tanker war back in the 1980s.

Last year, Iran produced 3.3 million barrels a day, nearly all of which went to China. Are we really sweating over China’s oil supply? But the American price of gasoline will rise, nonetheless. The US oil industry never wastes a war. At my local Chevron station, the price has already risen to $5.09 a gallon, up a buck on the week. It seems that gas station owners read the newspapers, too.

For now, it’s buy oil, sell equities. I had already written trade alerts to buy ExxonMobile (XOM) and Occidental Petroleum (OXY), but the Israelis beat me to the punch by a day. Up 40% on the year, I have no need to chase dubious and late trades.

If anyone doubted that insider trading was going on these days, look no further than the oil futures market, which began a dramatic rise on Monday and accelerated every day as rumors of an impending attack spread. Whether these are Israeli speculators or the home-grown variety is anyone’s guess.

Texas tea is now an impressive $17, or 30% off the May bottom. And it was climbing a wall of short positions in oil all the way, making the ascent even easier. There has been no actual disruption of supplies….yet. It is pure speculation that has taken oil prices northward.

If this does broaden out to a wider regional war, there will be consequences. Oil prices will soar to $100 or better. It will deepen the recession in the US, cause inflation to catch on fire, and send the S&P 500 back to 4,800 or lower. During the last oil shock in 1979, the US entered a three-year recession, inflation rose to 14%, and stocks fell 30%.

China will be the worst affected, which imports almost all of its oil. The US has, in fact, been weaning itself off Middle Eastern oil for decades and actually became energy independent on paper in 2015. However, specific Saudi oil types paired with matched US refiners will be hit, so there will be some disruption. A big recurring factor will be shipping insurance, which in the past has risen by 400% on these occasions.

Saudi Arabia now has a 746-mile East-West pipeline built in 1982 just for this contingency. It can carry 5 million barrels a day and 4 million barrels a day of excess production capacity to fill it. We didn’t have this during the last oil shock in 1979.

And in any case, the US is far less reliant on crude than it used to be. Barrels of oil per unit of GDP have been falling for 25 years. A new Lincoln Continental gets 25 miles per gallon instead of just eight.

A new Middle Eastern war DID renew the bid for gold and prompted me to double up my long position once again. I was looking at the gold and oil markets Friday morning and thought, “Gee, do I really want to buy oil up here”? The barbarous relic won out.

Emerging market central banks have been buying a massive 1,000 metric tonnes a year of the yellow metal as a US dollar alternative, and they are bound to continue. And gold loves uncertainty, which we have gobs of these days. It is the new “feel-good” investment.

The timing of the Israeli attack was interesting from another point of view. Ridiculously overbought stocks were just starting to roll over and were searching for a reason to fall. It’s now buy oil and sell equities. Is it possible that Tel Aviv has a technical analyst on staff?

If they don’t, they should.

With uncertainty reigning supreme and rising by the day, it’s looking like we may be stuck in a range for the rest of the year, from $5,500 for the ($SPX) on the low side to $6,500 on the high side. If we are lucky, we might get low single-digit returns for the year. It’s not the two back-to-back 20% years we saw in 2023-2024. But bull markets don’t live forever. The tough row to hoe is that’s all we might get for the next four years.

With the Volatility Index now well under $20, the easy money has been made this year. I increasingly feel like we are having to take increasing amounts of risk to achieve ever smaller returns. So I am going to shrink my book down to a minimum with the June 20 option expiration on Friday this week. After that, I’ll be waiting for the slow pitches to come to me.

By the way, the best way to strike out Babe Ruth was with a slow pitch (a great baseball player for you foreigners).

It was a good week for the Mad Hedge Fund Trader. My June performance raced up to +11.20%, taking us to new all-time highs on all metrics. That takes us to a year-to-date profit of +40.89%. My trailing one-year return exploded to a record +98.01%. That takes my average annualized return to +51.69%, the first time I‘ve hit the $51 handle ever, and my performance since inception to +792.18%.

It has been another tumultuous week. I took profits in long positions in (TSLA) and “RISK OFF” positions in (QQQ), (TLT), and (GLD). I added a new long in (BA) and rolled forward my “RISK OFF” position in (GLD) up and out. Some 17 of my last 18 positions have been profitable.

Some 63 of my 70 round trips in 2023, or 90%, were profitable. Some 74 of 94 trades were profitable in 2024, and several of those losses were really break-even. That is a success rate of +78.72%.

Try beating that anywhere.

Israel Attack on Iran Knocks Stocks, but not much. At the worst, the Dow Average was down 700 points. The big surprise was that bonds sold off as well in the wake of a successful 30-year auction yesterday. The weakness will continue as long as Israel continues to attack.

The First Half of 2025 is a Write-Off, with zero return on stocks. Of the 500 stocks in the S&P, 279 are up and 231 are up more than the Index. That is, unless you are a European or Japanese investor, where US stocks are still down 20% because of the collapse of the US dollar (FXY), (FXE), (FXB). Whole sectors of the US economy have been demolished, along with their stocks, including retailers, big pharma, energy, oil service, health care, utilities, railroads, overnight delivery, and consumer discretionary.

Oil prices Get a Rare Boost from the Israel Attack, up 8%. The U.S. said on Wednesday that personnel were being moved out of the Middle East because “it could be a dangerous place”, as the Iran nuclear talks stalled. Clearly, the US had advance notice of the attack. Non-essential personnel were sent home from the Baghdad embassy. Inflation is expected to accelerate in the coming months, prompted by America’s trade war.

Government Spending Hit a New All-Time High in May. Increased spending on Medicare and Homeland Security was a big factor. After running a short-lived surplus in April thanks to tax season receipts, the deficit totaled just more than $316 billion for the month, taking the year-to-date total to $1.36 trillion. The defect is now 14% higher than a year ago.

Tariff Revenues Hit New All-Time High, at $23 billion in May, up 60% YOY. US customs duties climbed to a record in May, helping shrink the budget deficit for the month, while doubts remain about the persistence of the inflows as the administration negotiates with trading partners and faces a judicial challenge over its levies.

The Core Inflation Rate Comes in Light, up 0.1% MOM in May to 2.4%. Food prices were up 0.3%. The report from the Labor Department on Wednesday also showed underlying price pressures muted last month. Economists say inflation has been slow to respond to sweeping tariffs, as most retailers are still selling merchandise accumulated before the import duties took effect. Next month’s report for June should show the first impact of tariffs.

Assets held in crypto funds hit a record high in May, as easing trade tensions lifted risk appetite and some investors used the digital currencies to hedge against market volatility and diversify from their U.S. holdings. Morningstar data on 294 crypto funds shows they attracted $7.05 billion in net inflows last month, the highest since December, bringing total assets under management to a record $167 billion.

Boeing (BA) heads into the Paris Air Show after booking 300 new orders and rolling out 38 new 737 MAX jets, a production rate it has been working to reach for more than a year. The company also delivered 45 aircraft last month. It was the sixth-highest monthly order tally in Boeing’s history, according to company data.

The orders included the largest widebody jet deal in Boeing’s history. A massive Qatar Airways order accounted for 130 Boeing 787s and 30 Boeing 777Xs, plus options for another 50 of the long-haul aircraft. It looks like the turnaround is here.

Market Volatility is Collapsing, with the Volatility Index ($VIX) down to the $16 handle, predicting a flat summer for equities. Implied volatilities for options are also in free fall, with Tesla options down from 85% to 55% over the weekend. That would give stocks a zero return for the year through September for 2025. Good thing we coined it when volatility was at extremes.

Administration Proposes 20% Withholding Tax on Foreign Corporations doing business in the US. The House Bill, known as Section 899, would allow the U.S. to add a new tax of up to 20% on foreigners with U.S. investments, including multinational companies operating in the U.S.. Some analysts call the provision a “revenge tax” due to its wording. It would apply to foreign entities if their home country imposes “unfair foreign taxes” against U.S. companies, which is virtually everyone. I can’t think of a better way to scare foreign investment away from the US.

Tesla is the Worst-Performing Large-Cap Stock this Year, suffering a $380 billion capital loss. Elon Musk’s personal hit was $75 billion. You can thank declining electric vehicle demand, Musk’s political controversies over his ties to far-right groups, and a very public feud with the president. I made a killing covering my Tesla shorts. I then used triple-digit option implied volatility to go cautiously long through $100 extremely deep in-the-money spreads. Tesla isn’t going to zero.

My Ten-Year View – A Reassessment

We have to substantially downsize our expectations of equity returns in view of the election outcome. My new American Golden Age, or the next Roaring Twenties, is now looking at multiple gale-force headwinds. The economy will completely stop decarbonizing. Technology innovation will slow. Trade wars will exact a high price. Inflation will return. The Dow Average will rise by 600% to 240,000 or more in the coming decade. The new America will be far more efficient and profitable than the old. My Dow 240,000 target has been pushed back to 2035.

On Monday, June 16, at 8:30 AM, the New York Empire State Manufacturing Index is printed.

On Tuesday, June 17, at 7:30 AM, the Retail Sales are announced.

On Wednesday, June 18, at 1:00 PM, we get the Fed Interest Rate Decision. We also get the Housing Starts and Building Permits, and Weekly Jobless Claims.

On Thursday, June 19, is a National Holiday, Juneteenth, and all financial markets are closed. This is the first time Juneteenth is a national holiday.

On Friday, June 20, at 7:30 AM, we get the Philadelphia Fed Manufacturing Index. At 1:00 PM, the Baker Hughes Rig Count is published.

As for me, during the late 1980s, the demand for Japanese bonds with attached equity warrants was absolutely exploding.

Japan was Number One, the engine of technological innovation. Everyone in the world owned a Sony Walkman. They were trouncing the United States with 45% of its car market.

The most conservative estimate for the Nikkei Average for the end of 1990 was 50,000, or up 27%. The high end was at 100,000. Why not? After all, the Nikkei had just risen tenfold in ten years, and the Japanese yen had tripled in value.

In 1989, my last full year at Morgan Stanley, the Japanese warrant trading desk accounted for 80% of the firm’s total equity division profits.

The deals were coming hot and heavy. Since Morgan Stanley had the largest Japanese warrant trading operation in London, a creation of my own, we were invited to join so many deals that the firm ran out of staff to attend the signings.

Since I was the head of trading, I thought it odd that the head of investment banking wanted to speak to me. It turned out that Morgan Stanley was co-managing two monster $3 billion bond deals on the same day. Could I handle the second one? Our commission for the underwritings was $10 million for each deal!

I thought, why not? Better to see how the other half lived. So, I said “yes.”

The attorneys showed up minutes later. I was given a power of attorney to sign on behalf of the entire firm and commit our capital to the underwriting $3 billion, five-year bond issue for the Industrial Bank of Japan. The deal was especially attractive as the bonds carried attached put options on the Nikkei, which institutional investors could buy to hedge their Japanese stock portfolios.

Since the Industrial Bank of Japan thought the stock market would never see a substantial fall, they happily sold short the put options. Only the Industrial Bank of Japan could have pulled this off, as it was one of the largest and highest-rated banks in Japan. I knew the CEO well.

It turned out that there was a lot more to a deal signing than I thought, as it was done in the traditional British style. We met at the lead manager’s office in the City of London in an elegant wood-paneled private dining room filled with classic 18th-century furniture.

First, there was a strong gin and tonic which you could have lit with a match. A five-course meal accompanied by a 1977 deep Pouilly-Fusé white and a 1952 Bordeaux red with authority. I had my choice of elegant desserts. Sherry and a 50-year-old port followed, along with Cuban cigars, which was a problem since I had just quit smoking (my wife recently bore twins).

The British were used to these practices. Any American banker would have been left staggering, as drinking during business hours back then was illegal in New York.

Then out came the paperwork. I signed with my usual flourish, and the rest of the managers followed. The Industrial Bank of Japan provided the Dom Perignon as they were about to receive $3 billion in cash the following week.

Then an unpleasant thought arose in the back of my mind. Morgan Stanley assumed the complete liability for their share of the deal. But did I just incur a massive personal liability as well?

Then I thought, naw, why pee on someone’s parade? Morgan Stanley’s been doing this for 50 years. Certainly, they knew what they were doing.

Besides, the Japanese stock market is going up forever, right? No harm, no foul. In any case, I left Morgan Stanley to start my own hedge fund a few months later.

Some seven months later, one of the greatest stock market crashes of all time began. The Nikkei fell 50% in six months and 85% in 20 years. Some 32 years later, the Nikkei still hasn’t recovered its old high.

For a few years, that little voice in the back of my mind recurred. The bonds issued by the Industrial Bank of Japan fell by half in months due to rocketing credit concerns. The IBJ’s naked short position in the Nikkei puts completely blew up, costing the bank $10 billion. The Bank almost went bankrupt. It was one of the worst-timed deals in the history of finance. The investors were burned big time.

Did I ever hear about the deal I signed again? Did process servers show up at my front door in London with a giant lawsuit? Did Scotland Yard chase me down with an arrest warrant?

Nope, nothing, nada, bupkis. I never heard a peep from anyone. It turns out you CAN lose $12 billion worth of other people’s money and face absolutely no consequences whatsoever.

Welcome to Wall Street.

Still, when the five-year maturity of the bonds passed, I breathed a sigh of relief.

My hedge fund got involved in buying Japanese equity warrants, selling short the underlying stock, creating massive short positions with a risk-free 40% guaranteed return. My investors loved the 1,000% profit I eventually brought in doing this.

Unlike most managers, I insisted on physical delivery of the warrant certificates, as the creditworthiness of anyone still left in the business was highly suspect. Other managers who took physical delivery used their warrants to wallpaper their bathrooms (really).

They all expired worthless. I made fortunes shorting the stock, and still have the warrants today by the thousands (see photo below).

In September 2000, the Industrial Bank of Japan, with its shares down 90%, merged with the Dai-Ichi Kangyō Bank and Fuji Bank to form the Mizuho Financial Group. It was a last-ditch effort to save the Japanese financial system after ten years of recession.

Morgan Stanley shut down their worldwide Japanese equity warrant trading desk, losing about $20 million and laying off 200. Some staff were outright abandoned as far away as Hong Kong. Morgan Stanley was not a good firm for running large losses, as I expected.

I learned a valuable trading lesson. The greater the certainty that people have that an investment will succeed, the more likely its failure. Think of it as Chaos Theory with a turbocharger.

But we sure had a good time while the Japanese equity warrant boom lasted.

Good Luck and Good Trading,

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

June 11 Biweekly Strategy Webinar Q&A

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Below, please find subscribers’ Q&A for the June 11 Mad Hedge Fund Trader Global Strategy Webinar, broadcast from Incline Village, NV.

Q: Will the LA riots have any impact on the market?

A: So far, they have not. The demonstrations have been confined to just a two-block area around the federal building—although on TV, it looks like the entire city is engulfed. The press coverage has been wildly exaggerated. They now have the problem of: where do you put 6,700 troops? So far, they’ve been sleeping on concrete in the Federal Building underground parking lot, but if you add more troops in there, where are they going to stay? I doubt they’re going to move into the Ritz-Carlton. I have talked to Marine division commanders down there, and the whole thing is a cluster…. No planning, no coordination. And it cost $134 million, which will have to be added to the deficit.

Q: What kind of market are you expecting this summer?

A: I expect we’ll peak out pretty soon and then go flat for the rest of the summer, and then attempt another year-end rally up maybe 10% from here, unless we get bad news on the trade front or inflation takes off. If we do get another supply shocker on the trade front, we could give up at least half of the recent gains and go down to 5,500 in the S&P 500. The new range for 2025 might be $5,500 – $6,500 for the S&P 500 (SPX).

Q: What is your favorite agricultural commodity stock to invest in?

A: Well, John Deere (DE) is the best play in the sector, and they are moving from a sales to a subscription model. They have a new software app that lets farmers predict when best to harvest their crops, and they’re selling that on a subscription basis, so it’s turning it into a technology stock. It’s already had great runs this year. If we get any more market selloffs, pick up John Deere (DE). If you assume the trade war with China ends someday, pick up (SOYB) as a pure ag play. The Chinese are the biggest buyers.

Q: Inflation seems to be easing up. Do you expect the Fed to cut 25 basis points later this year?

A: The answer is No, I do not. As long as you have the unknown of tariffs out there, the main concern of the Fed will be possible future inflation, which means no cuts. The longer these negotiations with China drag out, the more uncertain we are about the level of interest rates, and that’s going to cause the Fed to do nothing, which is their favorite thing to do. So, you may not get any interest rate cuts for a year. Employment seems to be holding up, but there are some chinks on the armor there, as I’ll show you in the numbers.

Q: Is the Fed likely to lower interest rates once the new Fed governor is appointed next year?

A: Absolutely, you can count on the next Fed government being hired specifically for the purpose of taking interest rates to zero. So, you can expect a half-point cut on the first day of the new Fed governor in June next year, and many successive cuts after that. Of course, if there is inflation at that time, it’ll cause it to take off and really catch on fire. We could get up to the 5%, 6%, 7% inflation rates very quickly if they do that.

Q: What is the best way to invest in oil other than directly in the futures?

A: Well, most people are not registered to trade futures, that’s why we don’t make specific futures recommendations. You can always buy the United States Oil Fund ETF (USO) that tracks fairly closely with oil itself, but the real bang for buck in the oil industry is buying oil companies, because they have a lot of upside leverage to the price of oil. My favorites there are going to be Occidental Petroleum (OXY) and Exxon Mobil (XOM), for the dividend.

Q: If foreigners boycott the US Treasury bond auctions, where are they deploying their U.S. Dollars (UUP)?

A: The answer is, foreigners are buying their own bonds—they’re buying Eurobonds or bringing the money back into Europe to the Euro, which is an appreciating currency now against the U.S. dollar. Remember, from the European point of view, everything American is depreciated by 20% just on the currency, and that includes our bonds.

Q: Do you recommend investing in the Australian dollar (FXA)?

A: I do. I think the weak dollar will continue for years—possibly as long as the current administration remains in power, which has a very vocal weak dollar policy. You could get another 10%-20% rise in the Australian dollar and the other currencies like (FXE), (FXY), (FXB) very easily.

Q: They are selling off the market, but I don’t really understand why. I haven’t heard any news.

A: It could be a sell-the-news on the end of the Chinese trade talks, or people getting out of the way ahead of tomorrow’s bond auction—the expectations are not great. We have NASDAQ down 16 on the day, (QQQ)’s are negative on the day now, and people are moving into precious metals. By the way, we took profits on our last gold trade first thing this morning.

Q: Why did Netflix (NFLX) suddenly sell off 10%?

A: If the London trade negotiations with Chinese hint at the end of the trade war, why do you need a trade war-proof stock like (NFLX)? Plus, the stock is up 50% in two months, so there’s pure profit taking and reallocation.

Q: With the U.S. economy slowing, do you see that corporate earnings will increase?

A: No, I do not. Corporate earnings grew at a 14% rate in Q1. I expect the growth rate to fall to zero by Q4, and that is another reason why stocks are very risky here. You don’t want to be paying up all-time-high prices for stocks that are seeing their earnings growth go to zero—not a good combination.

Q: Is there a chance the Chinese Yuan (CYB) will take over the dollar as a world currency?

A: Absolutely not—not in a million years. The Chinese yuan is at the very bottom of the list of currencies that would take over from the dollar. It is a manipulated currency, controlled by a dictatorship, and heavily dependent on international trade. It lacks the depth of a financial system to handle large amounts of international transactions, and all of their reserves are secret. We don’t know how much gold they really own. So, no transparency at all, whereas the United States has all the transparency in the world (or at least it used to.) So, that is a very safe statement to make.

To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log in to www.madhedgefundtrader.com, go to MY ACCOUNT, click on GLOBAL TRADING DISPATCH, TECHNOLOGY LETTER, or JACQUIE’S POST, then WEBINARS, and all the webinars from the last 12 years are there in all their glory.

Good Luck and Good Trading,

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

2021 Camping at Yosemite

Here is Your Next Decade Long Play

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The urgent question of the day is, WHICH stocks do you buy and forget about for good?

The answer is very simple. You buy cheap ones. And what are the cheapest stocks out there?

Commodity stocks.

My friend, Jim Umpleby, said that we are just entering a ten-year super cycle in commodities.

Jim should know. He is the CEO of Caterpillar (CAT), a company I have been following for 50 years. I even have one of their cool, worn yellow baseball caps from years past.

Needless to say, the global commodity shortage has created a stampede to buy the company’s heavy machinery.

Industrial commodities are, in fact, the perfect sector to buy right now. Take a look at the long-term chart for copper prices, which are a great bellwether for the entire industry. They are imminently poised to make another long-term upside breakout.

Copper last peaked at the beginning of 2011, when the Chinese infrastructure build-out suddenly outdrew to a juddering halt. Prices cratered from $4.60 a pound to a lowly $1.90. Mines were sold off, mothballed, or permanently closed at a record rate.

Copper prices fell so low that the US Mint finally started making a profit on pennies they struck.

Then a funny thing happened.

Copper prices were assisted by the global synchronized economic recovery that resumed in 2023. The share prices of copper and other major commodity producers have gone ballistic.

Freeport McMoran (FCX), the world’s largest copper producer (whose management is a long-time reader of this letter), has just seen its stock jump from $33.50 a share to $38.49. I expect it to someday reach $100.

You may think that it’s too late to get into the commodities space, but you’d be wrong. Having covered the sector for nearly half a century, there is one thing you learn quickly. While you can shut down a mine in a matter of weeks, it can take years to bring it back on line.

As for developing a new mine from scratch, that can take a decade by the time you get design, permits, infrastructure, equipment, and labor in place.

My Australian readers tell me that (BHP) is flying young skilled workers from Brisbane an incredible 2,000 miles to work in Northwest mines in a six-week-on, six-week-off work schedule and paying them $200,000 a year to do it. And they’re making a profit doing this!

The bottom line here is that a short squeeze has developed for industrial commodities, which will last for years.

Oh, and that global economic recovery? It is on vacation until investors get a sniff of the first interest rate cut in five years. That could happen in a few months.

At least you have something to buy now.

Commodities Are In Our Blood

Testimonial

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Hey John and the MAD Team,

You really nailed and keep nailing great reversals and trends that are just beginning to deserve a watchful eye.

I’m still a bit stuck on futures, but I realize the safety in your spreads is a lot smarter…Thx for all you know and for all you do.

Rod,

Alberta, Canada

The Mad Hedge June 3-5 Summit Replays are Up

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Listen to all 22 speakers opine on the best strategies, tactics, and instruments to use in these volatile markets. It is a true smorgasbord of investment strategies. Find the best one to suit your own goals.

The product discounts offered last week are still valid. Start, stop, and pause the videos at your leisure. Best of all, access to the videos is FREE. Access them all by clicking here.

We look forward to working with you, and the next summit is scheduled for September.

A Cow-Based Economics Lesson

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SOCIALISM
You have 2 cows.
You give one to your neighbor.

COMMUNISM
You have 2 cows.
The State takes both and gives you some watered-down milk.

FASCISM
You have 2 cows.
The State takes both and sells you some milk at an inflated price.

NAZISM
You have 2 cows.
The State takes both and sends you to a concentration camp.

BUREAUCRATISM
You have 2 cows.
The State takes both, shoots one, milks the other, and then throws the
milk away.

TRADITIONAL CAPITALISM
You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy grows.
You sell them and retire on the income, but worry about your cholesterol level and blood pressure.

ROYAL BANK OF SCOTLAND (VENTURE) CAPITALISM
You have two cows.
You sell three of them to your publicly listed company, using letters of
credit opened by your brother-in-law at the non-tax treaty offshore bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an anonymous intermediary to a Cayman Island Company secretly owned by the majority shareholder, who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. You sell one cow to buy a new president of the United States, leaving you with nine cows. No balance sheet was provided with the release. The public then buys your bull. You are lauded as a titan of free market capitalism.

SURREALISM
You have two giraffes.
The government requires you to take harmonica lessons.

AN AMERICAN CORPORATION
You have two cows.
You sell one and force the other to produce the milk of four cows.
Later, you hire a consultant to analyze why the cow has dropped dead. PETA sues you and pickets your office.

A FRENCH CORPORATION
You have two cows.
You go on strike, organize a riot, and block the roads because you
want three cows. And you have a fabulous time doing all this. The world is shocked.

A JAPANESE CORPORATION
You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and
produce twenty times the milk.
You then create a clever cow cartoon image called a Cowkimona and market
it worldwide. Then your stock crashes.

AN ITALIAN CORPORATION
You have two really fine, stylish cows which cost a fortune, but you don’t know where they are.
You decide to have lunch with a fine bottle of Antinori and top it all off with a potent grappa and double espresso.

A SWISS CORPORATION
You have 5000 cows. None of them belongs to you.
You charge the owners for storing them. The US IRS launches a criminal investigation and arrests every Swiss banker when they go shopping in New York.

A CHINESE CORPORATION
You have two cows.
You have 300 people milking them.
You claim that you have full employment and high bovine productivity.
You arrest the newsman who reported the real situation. Then your stock crashes.

AN INDIAN CORPORATION
You have two cows.
You worship them and feed them all your garbage.

A BRITISH CORPORATION
You have two cows.
Both are mad but drink great beer.

AN IRAQI CORPORATION
Everyone thinks you have lots of cows.
You tell them that you have none.
No one believes you, so they bomb the ** out of you and invade your
country.
You still have no cows, but at least you are now a Democracy.

AN AUSTRALIAN CORPORATION
You have two cows.
Business seems pretty good.
You close the office and go for a few beers at the bar to celebrate.

A NEW ZEALAND CORPORATION

You have two cows.

The one on the left looks very attractive. But no one cares because you are in New Zealand.

A Note on Assigned Options, or Options Called Away 

Diary, Homepage Posts, Newsletter

Occasionally, I get a call from Concierge members asking what to do when their short positions in options were assigned or called away. The answer was very simple: fall down on your knees and thank your lucky stars. You have just made the maximum possible profit for your position instantly.

We have the good fortune to have Seven spreads left that are deep in-the-money going into the June option expiration in 7 trading days. They are the:

Risk On

(MSTR) 6/$330-$340 call spread 10.00%

(TSLA) 6/$190-$200 call spread 10.00%

Risk Off

(GLD) 6/$275-$285 call spread -10.00%

(AAPL) 6/$220-$230 put spread -10.00%

(QQQ) 6/$540-$550 put spread -10.00%

(TLT) 6/$88-$91 put spread -10.00%

(WPM) 6/$75-$80 call spread -10.00%

In the run-up to every options expiration, which is the third Friday of every month, there is a possibility that any short options positions you have may get assigned or called away.

Most of you have short option positions, although you may not realize it. For when you buy an in-the-money vertical option debit spread, it contains two elements: a long option and a short option.

The short options can get “assigned,” or “called away” at any time, as it is owned by a third party, the one you initially sold the put option to when you initiated the position.

You have to be careful here because the inexperienced can blow their newfound windfall if they take the wrong action, so here’s how to handle it correctly.

Let’s say you get an email from your broker telling you that your call options have been assigned away. I’ll use the example of the in-the-money SPDR Gold Shares SPDR (GLD) May $275-$285 vertical BULL CALL debit spread, which you bought at $9.00 or best on May 6.

For what the broker had done, in effect is allowed you to get out of your call spread position at the maximum profit point 7 trading days before the May 17 expiration date. In other words, what you bought for $9.00 on May 6 is now worth $10.00, a gain of 11.11%!

All you have to do is call your broker and instruct them to exercise your long position in your (GLD) June 275 calls to close out your short position in the (GLD) June $285 calls.

This is a perfectly hedged position, with both options having the same expiration date, the same number of contracts in the same stock, so there is no risk. The name, number of shares, and number of contracts are all identical, so you have no net exposure at all.

Calls are the right to buy shares at a fixed price before a fixed date, and one option contract is exercisable into 100 shares.

To say it another way, you bought the (GLD) at $275 and sold it at $285, paid $9.00 for the right to do so for 33 trading days, so your profit is $1.00, or ($1.00 X 100 shares X 12 contracts) = $1,200. Not bad for a 33-day defined, limited risk play.

Sounds like a good trade to me.

Callaways most often happen in the run-up to a dividend payout. If you can collect a full monthly or quarterly dividend the day before the stock registration dates by calling away someone’s short option position, why not? In fact, a whole industry of these kinds of strategies has arisen in recent years in response to the enormous growth of the options market.

(GLD) and most tech stocks don’t pay dividends, so callaways are rare.

Weird stuff like this happens in the run-up to options expirations like we have coming.

A call owner may need to buy a long (GLD) position after the close, and exercising his long May 205 call is the only way to execute it.

Adequate shares may not be available in the market, or maybe a limit order didn’t get done by the market close.

There are thousands of algorithms out there that may arrive at some twisted logic that the calls need to be exercised.

Many require a rebalancing of hedges at the close every day, which can be achieved through option exercises.

And yes, options even get exercised by accident. There are still a few humans left in this market to make mistakes.

And here’s another possible outcome in this process.

Your broker will call you to notify you of an option called away, and then give you the wrong advice on what to do about it. They’ll tell you to take delivery of your long stock and then post additional margin to cover the risk.

Or they will tell you to sell your remaining long option position at whatever price you can get, wiping out most, if not all, of your great profit. This generates the maximum commission for your broker.

Either that, or you can just sell your shares on the following Monday and take on a ton of risk over the weekend. This generates oodles of commission for the brokers but impoverishes you.

There may not even be an evil motive behind the bad advice. Brokers are not investing a lot in training staff these days. It doesn’t pay. In fact, I think I’m the last one they really did train 50 years ago.

Avarice could have been an explanation here, but I think stupidity and poor training, and low wages are much more likely.

Brokers have so many legal ways to steal money that they don’t need to resort to the illegal kind.

This exercise process is now fully automated at most brokers, but it never hurts to follow up with a phone call if you get an exercise notice. Mistakes do happen.

Some may also send you a link to a video on what to do about all this.

If any of you are the slightest bit worried or confused by all of this, come out of your position RIGHT NOW at a small profit! You should never be worried or confused about any position tying up YOUR money.

Professionals do these things all day long, and exercises become second nature, just another cost of doing business.

If you do this long enough, eventually you get hit. I bet you don’t.

Calling All Options!

The Market Outlook for the Week Ahead, or The Blind Man’s Market

Diary, Homepage Posts, Newsletter

Last week, the markets ignored a collapsing bond market, exploding national debt, global shooting wars, trade wars, tariff chaos, rapidly weakening economic data, and the shredding of our international relations. It’s a lot like 1999, when every news headline was taken as yet another reason to buy more tech stocks, most of which are no longer with us.

Only a blind man would be establishing new longs up here. How can this madness take place? What happens when someone hands the market a pair of glasses? Markets are priced for perfection, but we live in anything but a perfect world.

The explanation is very simple. Investors have been focusing on promised corporate tax cuts, some 100% of which will go into stock buybacks. It explains why the biggest buyback companies, like Alphabet (GOOGL), Microsoft (MSFT), Nvidia (NVDA), JP Morgan (JPM), and Visa (V), have seen the best performance since the April 9 bottom. Only in the case of Apple (AAPL) have gigantic share buybacks kept their shares falling more, instead of rising.

In fiscal year 2024, the U.S. federal government collected approximately $530 billion in revenue from corporate income taxes. This accounted for 11% of the total federal government revenue collected in FY2024, which was roughly $5 trillion. If the corporate tax rate drops from 21% to 15% as the House budget bill proposes, that would free up a further $151 billion for more stock buying.

And that’s just the appetizer. Add in other proposed tax breaks, such as the expensing of capital investment entirely in the year the money was spent. That takes the total corporate tax breaks rise to a mind-numbing $664 billion, all of which will go into stock buybacks. That’s on top of the $1.2 trillion in buybacks budgeted for this year.

And that’s your entire bull case right there.

Corporations made all-time high profits in 2024 and haven’t even been asking for tax cuts. Their origins are purely ideological.

Some 100% of this will be borrowed from future generations. It is amazing how short-term the view of this administration is. By adding $3 trillion to the deficit, the strategy seems to be “Play now and pay later,” except that later we will be broke. We are eating all of our seed corn. It’s like there has been a hostile takeover of the US economy by an asset-stripping vulture fund.

Another explanation for the endless bull is that the muscle memory for both individual and institutional investors for the past 16 years has been to “Buy the dip”. Despite a brief two-month dip during the 2020 Pandemic and a six-week heart attack this year, this strategy has worked the entire time.

Institutions are still underweight equities. No serious professional bought into the rapidly weakening fundamentals for the US economy. If you back out the previous month’s revisions, the May Nonfarm Payroll Report came in at only 44,000 jobs. Weekly Jobless Claims are at an 8-month high. Q2 corporate profits are expected to be down 25%-50%. Yet earnings multiples are back at all-time highs.

It’s starting to look like a 1999 stock market. The worse the news gets, the more stocks people want to buy.

It’s not an outlook you bet the ranch on. It’s an accident waiting to happen. Look what happened in February the last time we saw these 22X valuations. But the market sees what it wants to see.

There is one minor chink in this argument. If the China negotiations blow up and we go back to another triple-digit business-killing tariff level, we double top immediately, and the (SPX) goes back and retests the lows at 4,800.

You tell me what’s going to happen.

I’ve made most of my money this year on the short side, the first time since 2008. By cherry picking studious timing with (AAPL), (TSLA), (MSTR), and (NVDA) and hedging your shorts with gold and silver longs, you can make money even when indexes rise, such as the art of the hedge fund manager (see below).

Buy low/sell high, it’s my new investment strategy. I’m thinking of patenting it. Sell high, buy back low also works.

My silver call (SIL), (SLV), (AGQ) unfolded nicely last week, the white metal picking up a quick 10% to rise to a new 13-year high. We may get some profit taking here as silver has far more industrial demand than gold, so the recession will be a drag. But the long-term bull market is on, so buy dips from here on. $50 here we come.

Tesla provided us with a nice windfall on Thursday, with some of the most chaotic options trading in market history. On the week, the shares dropped by an incredible $85, or 23.2%. More importantly, the implied volatility for the options soared from 59% to 85%, with some strike prices closing as high as 105%.

What happened was that long-term Tesla bulls were writing out-of-the-money calls against their positions to soften the blow, mitigate risk, and lower their average cost. Cascading market orders to sell calls drove implied volatilities to unbelievable levels. As a result, I was able to cover my shorts at great prices and open up news longs at even better prices.

Traders live for events like these.

In the meantime, the value of my 2018 Model X P100D has shrunk this year from $65,000 to $35,000, according to Kelley Blue Book (click here.) I can’t park on the street in San Francisco for fear of having a swastika scratched on the side. And Tesla is offering me a brand new CyberTruck for $80,000, down 33% from the launch price, with zero percent financing for five years, lifetime free charging, and free full self-driving. They have 20,000 of them.

Brand destruction is a cruel master.

My very long-term target for Tesla is $4,600. So I shouldn’t mind buying the stock at $180, which I did on Friday. At the moment, it is a money-losing car company with potential businesses in Robotaxis, xAI, robots, and solar energy, that don’t actually exist yet. You’re essentially buying the dream. But the dream has been working for 15 years with my average share cost of $2.35. We just have to get Elon Musk to focus on engineering instead of politics.

It’s easy to see how legions of traders make a living solely trading (TSLA) options.

Any Buyers?

By the way, if you’re looking for rare earths play, look at Las Vegas-based MP Materials. Morgan Stanley just recommended the stock as their best play in the sector, causing it to soar 50% in a week.

My June performance rocketed up to +6.59%, taking us to new all-time highs on all metrics. That takes us to a year-to-date profit of +36.28%. My trailing one-year return exploded to a record +90.96%. That takes my average annualized return to +50.84% and my performance since inception to +788.18%.

It has been another week in an active market. I added a new long in Wheaton Precious Metal (WPM), taking advantage of a major upside breakout in silver. I also added a short in the (TLT), betting that the next US Treasury auction will go badly. I took profits in short positions in (TSLA) and (MSTR).

The Mad Hedge Technology Letter took profits in a long position in Palo Alto Networks (PANW). That leaves me a shrinking 60% “RISK OFF” in (GLD), (SPY), (AAPL), (TLT), and (WPM), 30% long in (MSTR) and (TSLA), and 10% cash.

Some 63 of my 70 round trips in 2023, or 90%, were profitable. Some 74 of 94 trades were profitable in 2024, and several of those losses were really break-even. That is a success rate of +78.72%.

Try beating that anywhere.

Nonfarm Payroll Report comes in weak. Nonfarm payrolls increased 139,000 last month after a combined 95,000 in downward revisions to the prior two months for a net gain of only 44,000. The unemployment rate held at 4.2%, while wage growth accelerated. Friday’s report narrowly exceeded forecasts, bolstering bulls who were primed for disappointment after data this week raised doubts about the buoyancy of American hiring.

US Trade Deficit Shrinks at the Fastest Rate in History, as imports collapse, a classic sign of a deteriorating economy. The rush of imports to beat the tariffs ended. The trade gap contracted by a record 55.5% to $61.6 billion, the lowest level since September 2023, the Commerce Department’s Bureau of Economic Analysis said on Thursday. Data for March was revised to show the trade deficit having widened to an all-time high of $138.3 billion rather than the previously reported $140.5 billion.

Worker Productivity is Collapsing, at a faster pace than initially thought in the first quarter, driving labor costs sharply higher at a time when businesses are already facing rising costs from tariffs on imported goods. Nonfarm productivity, which measures hourly output per worker, decreased at a 1.5% annualized rate last quarter, the Labor Department’s Bureau of Labor Statistics said on Thursday.

That was revised down from the previously reported 0.8% pace of decline and marked the first drop since the second quarter of 2022.

Silver Hits a 13-Year High, at $35 an ounce, and is catching up with gold quickly. Known both as a safe-haven asset and a vital industrial metal, silver has surged 24% so far in 2025. Industrial uses account for more than half of global silver demand, according to the Silver Institute industry association. $50 here we come!

U.S. Economic Output (GDP) will Fall as a Result of New Tariffs on Foreign Goods, the non-partisan Congressional Budget Office said on Wednesday. The CBO said the tariffs, which have been challenged in court cases, will raise the costs of consumer and capital goods while increasing inflation.

ADP Hits Two-Year Low, as new hiring grinds to a halt. Sectors including business services, education, and health shed jobs, pointing to a weakened demand for workers. Private-sector payrolls increased by 37,000 last month, lower than all estimates. That marked the second month in a row when the figures were well below expectations. After a strong start to the year, hiring is losing momentum.

US Factory Orders Dive, New orders for U.S.-manufactured goods dropped sharply in April, and business spending on equipment appeared to have lost momentum at the start of the second quarter as the boost from front-loading of purchases ahead of tariffs faded.

ISM Nonmanufacturing PMI drops to one-year low, down 49.9, indicating an economic contraction. Tariff uncertainty complicates business planning and affects financial guidance. Supply chain bottlenecks and tariffs drive inflation concerns. Yet another recession indicator.

Housing Stocks Plunge to One-Year Lows, on yesterday’s spike in long bond and mortgage rates. Construction spending collapsed in April, down 0.9%, for both single and multifamily homes. Another red flag for the economy.

Meta to Buy Nuclear Power from Constellation (CEG), as AI energy demand soars. The parent company of Facebook, Instagram, and WhatsApp signed a 20-year contract to buy 1,121 megawatts from Constellation’s Clinton plant starting in mid-2027, when a state subsidy expires. Constellation, the biggest US nuclear operator. Buy (CCJ) on dips.

Money is Fleeing Equity Funds. U.S. equity funds faced a second successive weekly outflow in the week through May 28 as tariff threats from and concerns over rising borrowing costs prompted investors to cut exposure to U.S. assets. Investors pulled a net $5.46 billion worth of capital from U.S. equity funds during the week, adding to the previous week’s $11.02 billion net sales, data from LSEG Lipper showed.

OPEC Plus is Ramping Up Production. The world’s largest group of oil producers, OPEC+, stuck to its guns at a Saturday online meeting with another big increase of 411,000 barrels per day for July as it looks to wrestle back market share and punish over-producers. Having spent years curbing production – more than 5 million barrels a day (bpd) or 5% of world demand – eight OPEC+ countries made a modest output increase in April before tripling it for May, June, and now July. Avoid all energy plays.

My Ten-Year View – A Reassessment

On Monday, June 9, at 8:30 AM EST, the Wholesale Inventories are printed.

On Tuesday, June 10, at 7:30 AM, the Redbook Retail Sales is announced.

On Wednesday, June 11, at 1:00 PM, the Core Inflation Rate is released.

On Thursday, June 12, at 8:30 AM, the Weekly Jobless Claims are disclosed. We also get the Producer Price Index.

On Friday, June 13, at 7:30 AM, we get the University of Michigan Consumer Sentiment. At 1:00 PM, the Baker Hughes Rig Count is published.

As for me, I didn’t know what to expect when I landed on the remote South Pacific Island of Yap in 1979, one of the Caroline Islands, but I was more than pleasantly surprised.

Barely out of the Stone Age, Yap lies some 3,000 miles west of Hawaii. It was famed for the ancient lichen-covered stone money that dotted the island, which had no actual intrinsic value.

The value was in the effort that went into transporting them. With some cylindrical pieces larger than cars, geologists later discovered that they had been transported some 280 miles by outrigger canoe from the point of origin sometime in the distant past. Since Yap had no written language, there are no records about them, only folktales.

I often use the stone money of Yap as an example of the arbitrariness of fiat money. Who’s to say which is more valuable: a 500-pound piece of rock or a freshly printed $100 Benjamin from the US Treasury?

You decide.

The natives were a gentle and friendly people. They wore grass skirts purely for the benefit of Western visitors. They preferred to walk around as nature made them.

There was no hotel on the island at the time, so I was invited to stay with a local chief (picture below).

One of my hosts asked if I was interested in seeing a Japanese Zero fighter. Yap wasn’t invaded by the US during WWII because it was bypassed by MacArthur on his way to the Philippines. The Japanese troops were repatriated after the war, but most of their equipment was left behind. It was still there.

So it was with some anticipation that I was led to a former Japanese airfield that had been abandoned for 35 years. There, still in perfect formation, was a squadron of zeroes. The jungle had reclaimed the field, and several planes had trees growing up through their wings.

The natives had long ago stripped them of anything of value, the machine guns, nameplates, and Japanese language instruments. But the airframes were still there, exposed to the elements and too fragile to move.

During my stay, I came across an American Peace Corps volunteer desperate for contact with home. A Jewish woman in her thirties, she had been sent there from New York City to teach English and seemed to have been forgotten by the agency.

I volunteered for the Peace Corps. myself out of college, but it turned out they had no need for biochemists in Fiji, so I was interested in learning about her experience. She confided in me that she had tried wearing a grass skirt to blend in, but got ants on the second day. We ended up spending a lot of time together, and I got a first-class tour of the island.

Suffice it to say that she was thrilled to run into a red-blooded American male. I wish I had taken a picture of her, but the nearest color film processing was back in Honolulu, and I had to be judicious in my use of film.

The highlight of the trip was a tribal stick dance put on in my honor around an evening bonfire among much yelping and whooping. It was actually a war dance performed with real war clubs, and their furiousness was impressive.

I had the fleeting thought that I might be on the menu. Cannibalism had been practiced here earlier in the century. During the war, when starvation was rampant, several of the least popular Japanese soldiers went missing, their bodies never found. When men come screaming at you with a club in the night, your imagination runs wild.

Alas, I could only spend a week on this idyllic island. I was on a tight schedule courtesy of Air Micronesia, and deadlines beckoned. Besides, there was only one plane a week off the island.

It was on to the next adventure.

A Few New Friends

Large Denomination Stone Money

My Accommodation

A Neglected Japanese Zero

Good Luck and Good Trading,

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

PLEASE Sign Up for My Free Text Alert Service Now!

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A few years ago, my customer support office spent the entire day taking calls from readers who missed my Trade Alert to buy the iShares Barclays 20+ Year Treasury Bond Fund (TLT) March 2019 $177-$180 in-the-money vertical BEAR PUT spread at $2.40 or best. A few days later, it delivered a $4,000 profit.

The bond market completely fell apart afterwards, taking the spread up from $2.40 to $2.70 within minutes.

And I should warn you, this kind of instant blowout result is not unusual at the Mad Hedge Fund Trader, as long-time followers of my service will tell you.

Having Trade Alerts that move so fast into the money is a good problem to have.

Subscribers to the Text Alert Service received messages on their cell phones within seconds worldwide, and thus were able to act immediately on my perfectly timed Trade Alerts.

Every time I see this happen, I am amazed that I have lived this long to see this technology develop. It’s all really great…. when it works.

This eliminates frustrating delays caused by traffic surges on the Internet itself and by your local server. And guess what? During major market crashes, the entire internet slows down. Really!

Because our email application, AWeber Solutions, is unable to invest fast enough to keep up with the growth of its own business, we are encountering more frequent delays in our emails (see messages below).

To sign up for the Trade Alert Service, please email Filomena directly at support@madhedgefundtrader.com with your mobile number, and she will set you up.

Time is of the essence in these volatile markets. Individual traders need to grab every advantage they can. This is an important one.

Good luck and good trading.

To sign up for the Trade Alert Service, please email Filomena directly at support@madhedgefundtrader.com. She will set you up.

Time is of the essence in these volatile markets. Individual traders need to grab every advantage they can. This is an important one.

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