Call me a nerd, but instead of spending my Sundays watching football, I pour over data analyzing the monetary aggregates. That?s a tough thing to say for someone whose dad was a lineman on the University of Southern California?s legendary 1947 junior varsity football team.

This is so I can gain insights into the future performance of assets classes. What I am seeing these days is not just unusual, it?s bizarre. Call it a double reverse, a Hail Mary, and a Statue of Liberty all combined into one.

You can clearly see the impact of QE2 at the end of 2010 on the chart below, which caused the monetary base to explode and triggered a six month love fest for all risk assets. Hard asset prices, like energy, commodities, the grains, and precious metals did especially well, leading to fears of resurging inflation. This prompted the European Central Bank to commit a massive policy blunder by raising interest rates twice. The US dollar (UUP) was weak for much of this time.

When quantitative easing ended in June of that year, not only did the base stop growing, it started shrinking. Hard assets rolled over like the Bismarck, and gold peaked in August. No surprise that when you take away the fuel, the fire goes out. And guess what else happened? The dollar began an uptrend that continues unabated.

So what happens next? Given the continuing strength of the economic data, I think that the prospects of a taper have been greatly diminished. Not only has it been taken off the back burner, the flame has been extinguished and the pot put back into the cupboard.

Needless to say, if this trend continues it will have an inflationary impact on the global economy as a whole, and ?RISK ON? assets specifically. It?s simply a question of supply and demand. Print a lot more dollars and you create a supply shortage of other assets, forcing bidders to pay up.

Dad Was Always a Great Monetarist

I sit here painfully typing this letter, as my fingertips have been worn down to bloody stumps. I have been pounding out the Trade Alerts since the month started, sending out 37, and the month is only half over. That works out to a 3.3636 Trade Alerts a day!

I have been so busy that I literally haven?t had time to eat, living entirely on black coffee, and losing three pounds since November 1. Maybe I should go into the weight loss business. I hear it?s more profitable than this financial stuff.

Not only have I worked myself to the bone, my staff is rapidly wearing out as well. Everyone is taking a well-earned rest this weekend, melting a few ice cubes along the way.

Still, you don?t get market melt ups like this very often in life. You have to strike while the iron is hot, make hay while the sun shines, and carpe diem. Usually I warn investors that if they ?invest in haste, they will repent at leisure.? In this market it?s the opposite. Invest at leisure, repent with haste.

Still, it?s all worth it when it?s working. Including both open and closed trades, the last 18 consecutive Trade Alerts have been profitable. I am rapidly closing in on an old record of 25 successful Trade Alerts, made earlier this year.

The Global Trading Dispatch service of the Mad Hedge Fund Trader is now up 56.4% in 2013. The November month to date record is now an enviable 11.92%.

The three-year return is an eye popping 111.43%, compared to a far more modest increase for the Dow Average during the same period of only 30%.
That brings my averaged annualized return up to 38.2%.

This has been the profit since my groundbreaking trade mentoring service was launched 35 months ago. These numbers place me at the absolute pinnacle of all hedge fund managers, where the year to date gains have been a far more pedestrian 3%. I predict the arrival of a lot more job seekers on Craig?s List in January.

I took profits on all of my extensive shorts in the Treasury bond market, taking advantage of the sudden back up in ten-year yields from 2.47% to 2.77%, the sharpest move of the year. I then reloaded on the first 9 basis point back up in yields

I then bet that the stock market would continue another tedious sideways correction going into the Thanksgiving holidays. I bought an in the money put spread on the S&P 500, and then bracketed the index through buying an in the money call spread. Both of these expired profitably on Friday.

I then took advantage of the weakness to add another long in the Industrials ETF (XLI), a rifle short at one of the best performing sectors of the market. I piled on more shorts in the Japanese yen (FXY), (YCS), believing that the Bank of Japan will have to accelerate its monetary easing program to deal with an economic slowdown. I also caught the China recovery play by going long the Australian dollar (FXA).

This is how the pros do it, and you can too, if you wish.

Carving out the 2013 trades alone, 74 out of 89 have made money, a success rate of 83%. It is a track record that most big hedge funds would kill for.

My esteemed colleague, Mad Day Trader Jim Parker, has also been coining it. He caught a spike up in the volatility index (VIX) by both lapels. He also was a major player on the short side in bonds, to the delight of his many followers.

The coming winter promises to deliver a harvest of new trading opportunities. The big driver will be a global synchronized recovery that promises to drive markets into the stratosphere in 2014. The Trade Alerts should be coming hot and heavy. Please join me on the gravy train.

Global Trading Dispatch, my highly innovative and successful trade-mentoring program, earned a net return for readers of 40.17% in 2011 and 14.87% in 2012. The service includes my Trade Alert Service and my daily newsletter, the Diary of a Mad Hedge Fund Trader. You also get a real-time trading portfolio, an enormous trading idea database, and live biweekly strategy webinars. Upgrade to Mad Hedge Fund Trader PRO and you will also receive Jim Parker?s Mad Day Trader service.

To subscribe, please go to my website at www.madhedgefundtrader.com, find the ?Global Trading Dispatch? box on the right, and click on the lime green ?SUBSCRIBE NOW? button.