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Mad Hedge Fund Trader

October 7, 2013

Diary, Newsletter, Summary

Global Market Comments
October 7, 2013
Fiat Lux

Featured Trade:
(NOVEMBER 1 SAN FRANCISCO STRATEGY LUNCHEON),
(SAY GOODBYE TO THE WASHINGTON DISCOUNT),
(XLY), (UCC), (XLI), (UXI), (XLK), (ROM), (XLV), (RXL),
(THIS IS NOT YOUR FATHER?S NUCLEAR POWER PLANT)

Consumer Discret Select Sector SPDR (XLY)
ProShares Ultra Consumer Services (UCC)
Industrial Select Sector SPDR (XLI)
ProShares Ultra Industrials (UXI)
Technology Select Sector SPDR (XLK)
ProShares Ultra Technology (ROM)
Health Care Select Sector SPDR (XLV)
ProShares Ultra Health Care (RXL)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-10-07 01:06:112013-10-07 01:06:11October 7, 2013
Mad Hedge Fund Trader

November 1 San Francisco Strategy Luncheon

Diary, Lunch, Newsletter

Come join me for lunch at the Mad Hedge Fund Trader?s Global Strategy Update, which I will be conducting in San Francisco on Friday, November 1, 2013. An excellent meal will be followed by a wide-ranging discussion and an extended question and answer period.

I?ll be giving you my up to date view on stocks, bonds, currencies, commodities, precious metals, and real estate. And to keep you in suspense, I?ll be throwing a few surprises out there too. Tickets are available for $191.

I?ll be arriving at 11:00 and leaving late in case anyone wants to have a one on one discussion, or just sit around and chew the fat about the financial markets.

The lunch will be held at a private club in downtown San Francisco near Union Square that will be emailed with your purchase confirmation.

I look forward to meeting you, and thank you for supporting my research. To purchase tickets for the luncheons, please go to my online store.

San Francisco

https://www.madhedgefundtrader.com/wp-content/uploads/2013/02/San-Francisco-e1410363065903.jpg 238 359 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-10-07 01:05:402013-10-07 01:05:40November 1 San Francisco Strategy Luncheon
Mad Hedge Fund Trader

Say Goodbye to the Washington Discount

Newsletter

If it hasn?t happened by today, then it is no more than a week away. The deep discount suffered by American stocks is about to go away. Thanks to the manufactured uncertainty emanating from the nation?s capital created by the government shutdown, stocks have been selling at a 10% or more discount to where they should be.

As things stand, the shutdown is chopping about 1/8% a week from America?s GDP growth. If it runs for another week, it will add up to a 0.25%. What economists haven?t considered in these figures is the additional 0.25% loss that will come from a restart of the government. People are so afraid of the shocking cessation of many government services that they are cleaning out ATM?s, forcing the banks to maintain higher than normal cash levels.

The 2013 Federal budget provides for $3.8 trillion in government spending out of a $16.5 trillion GDP, some 23%. I tried to get more precise figures by clicking the link for the Department of Commerce Bureau of Economic Analysis website (http://www.bea.gov/index.htm ), and was greeted by the closest thing you can imagine for a middle fingered salute. You just don?t snap your fingers and expect a quarter of the economy to sprint out of the blocks.

There is another cost to consider. All government statistics have been rendered meaningless for the rest of the year. Even if the government restarts tomorrow, aberrations in the data will plague us well into next year, making economic forecasts more difficult and less meaningful than usual. This is when the moving averages for data series will really earn their pay.

My political theory for the past three years has been that the Tea Party wing of the Republican Party will act unimaginably stupid, dragging governance to new lows, wreaking the maximum amount of damage possible. They feel that if they can?t own the government, they must break it.

Gerrymandering means they can?t be dislodged by elections. These people are being cheered by supporters for their appalling behavior back home in the heartland of America. This will ultimately lead to the destruction of the Republican Party, and is why President Obama is quite happy to sit on his hands and do nothing. Why interfere when your opponent is committing suicide?

So far I have been right on the money. An accurate political read has been a major element in delivering my 100% gain since the end of 2010, no matter how unpopular it may be.

This analysis has the government shutdown lasting until October 17, little more than a week from today, and vastly longer than expected. That?s the day the government shutdown rolls into the debt ceiling crisis. With far more cataclysmic consequences at stake, this crisis has a greater likelihood of getting solved.

This is all spectacular news for investors, who have recently been boning up on their history. The 17 government shutdowns since 1975 have averaged six days. After each one, stock rose by an average 7.8% in the following six months, and by 13.2% over the following year. We could be in for similar returns in this round. ?It looks like its going to be off to the races once again, and my yearend target of 1,780 for the (SPY) is looking good.

The 0.5% in growth we are losing this quarter will get rolled into the next. Q1, 2014 was already setting up to be hot, thanks to a global synchronized recovery in the US, Europe, Japan, China, and even Australia. Some 60% of world GDP is now enjoying unprecedented easy money. This concentration of more growth into the next quarter could take the US GDP figure as high as an annualized 3.5%.

Portfolio managers have already figured this out, which is why they are relentlessly buying every dip, and explains the modest 3.5% drop in the S&P 500 we have seen since the shutdown began. Providing additional rocket fuel is the fact that many firms are under the gun to get new money into the market by the end of the year.

There is one certainty here. The shutdown firmly takes a taper by the Federal Reserve off the table for 2013. It turns out that Ben Bernanke correctly read that the Tea Party would drive the economy off a cliff, and that the safety net of continued monetary stimulus was needed. Nice call, Ben! This will give the bulls the fodder they need to take stock prices up all the way until next spring, when we may finally get a real taper.

I would be using the down days from here on to scale into the hottest sectors of the market, especially the 2X leveraged ETF?s. You can do this with consumer discretionary stocks with the (XLY), (UCC), industrials with (XLI), (UXI), technology with (XLK), (ROM), and with health care through the (XLV), (RXL).

This is what I really want to know. Last Sunday, the hit TV drug show, Breaking Bad, saw its series finale. The cult terrorism drama, Homeland, delivered its third season opener at the same time. The next day, the government closed.

Do you think there is a connection?

XLI 10-4-13

XLV 10-4-13

XLK 10-4-13

XLY 10-4-13

SPY 10-4-13

Galup Daily Eco Confidence

National Parks Closed

Breaking BadIs There a Connection?

https://www.madhedgefundtrader.com/wp-content/uploads/2013/10/National-Parks-Closed.jpg 357 541 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-10-07 01:04:392013-10-07 01:04:39Say Goodbye to the Washington Discount
Mad Hedge Fund Trader

This is Not Your Father?s Nuclear Power Plant

Diary, Newsletter

On my recent trip to Oregon I met with venture capital investors in NuScale Power, which is trailblazing, the brave new world of ?new? nuclear. Their technology has been pioneered by Dr. Jose Reyes, dean of the School of Engineering at Oregon State University in Corvallis.

This is definitely not your father?s nuclear power plant. The company has applied for design certification with the Nuclear Regulatory Commission for a mini light water reactor with a passive cooling system rated at 45 megawatts. The idea is to site a dozen of these together, which in aggregate can generate 540 Megawatts, little more than half the size of the old 1 gigawatt monsters.

Running a dozen small reactors instead of one big one makes for vastly easier operation and maintenance, as individual units can be brought on and offline as needed. Small size also eliminates the need for gargantuan, expensive containment structures. This power source runs at night, when solar and wind plants are offline. Modular design makes mass production of these units economical.

Once certification, approval, permitting, and construction are complete, we can expect to see the NuScale plants running by 2018. After all, if something similar works in nuclear powered submarines and aircraft carriers, why not in industrial zones on the outskirts of town? For more on NuScale?s innovative efforts visit their website at the following link: ?http://www.nuscalepower.com/ .

NuScale System Design

https://www.madhedgefundtrader.com/wp-content/uploads/2013/10/NuScale-System-Design.jpg 475 394 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-10-07 01:03:492013-10-07 01:03:49This is Not Your Father?s Nuclear Power Plant
Mad Hedge Fund Trader

October 4, 2013

Diary, Newsletter, Summary

Global Market Comments
October 4, 2013
Fiat Lux

Featured Trade:
(OCTOBER 9 GLOBAL STRATEGY WEBINAR),
(AN EVENING WITH THE CHINESE INTELLIGENCE SERVICE),
(FXI), (CYB), (BIDU), (CHL), (BYDDF), (CHA)

iShares China Large-Cap (FXI)
WisdomTree Chinese Yuan (CYB)
Baidu, Inc. (BIDU)
China Mobile Limited (CHL)
BYD Company Ltd. (BYDDF)
China Telecom Corp. Ltd. (CHA)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-10-04 01:05:372013-10-04 01:05:37October 4, 2013
Mad Hedge Fund Trader

October 3, 2013

Diary, Newsletter, Summary

Global Market Comments
October 3, 2013
Fiat Lux

Featured Trade:
(JOIN THE INVEST LIKE A MONSTER SAN FRANCISCO TRADING CONFERENCE),
(THE MAD DAY TRADER?S Q4 TARGETS),
(SPY), (QQQ), (TLT), (USO), (UNG),
(GLD), (FXY), (FXE),
(AN AFTERNOON WITH DR. PAUL EHRLICH),
(POT), (MOS), (AGU), (CORN), (WEAT), (SOYB)

SPDR S&P 500 (SPY)
PowerShares QQQ (QQQ)
iShares Barclays 20+ Year Treas Bond (TLT)
United States Oil (USO)
United States Natural Gas (UNG)
NewGold Debentures (GLD)
CurrencyShares Japanese Yen Trust (FXY)
CurrencyShares Euro Trust (FXE)
Potash Corp. of Saskatchewan, Inc. (POT)
The Mosaic Company (MOS)
Agrium Inc. (AGU)
Teucrium Corn (CORN)
Teucrium Wheat (WEAT)
Teucrium Soybean (SOYB)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-10-03 01:07:532013-10-03 01:07:53October 3, 2013
Mad Hedge Fund Trader

Join the ?Invest like a Monster? San Francisco Trading Conference

Diary, Newsletter

I am pleased to announce that I will be participating in the Invest like a Monster Trading Conference in San Francisco during October 25-26. The two-day event brings together experts from across the financial landscape that will improve your understanding of markets by a quantum leap and measurably boost your own personal trading performance.

Tickets are available for a bargain $399. If you buy the premium $499 package you will be invited to the Friday 6:00 pm VIP cocktail reception, where you will meet luminaries from the trading world, such as tradeMONSTRS?s Jon and Pete Najarian, Guy Adami, Jeff Mackey, and of course, myself, John Thomas, the Mad Hedge Fund Trader. All in all, it is great value for money, and I?ll personally throw in a ride on the City by the Bay?s storied cable cars for free.

Jon Najarian is the founder of optionMonster, which offers clients a series of custom crafted computer algorithms that give a crucial edge when trading the market. Called Heat Seeker ?, it monitors no less than 180,000 trades a second to give an early warning of large trades that are about to hit the stock, options, and futures markets.

To give you an idea of how much data this is, think of downloading the entire contents of the Library of Congress, about 20 terabytes of data, every 30 minutes. His firm maintains a 10 gigabyte per second conduit that transfers data at 6,000 times the speed of a T-1 line, the fastest such pipe in the civilian world. Jon?s team then distills this ocean of data on his website into the top movers of the day. ?As with the NFL,? says Jon, ?you can?t defend against speed.?

The system catches big hedge funds, pension funds, and mutual funds shifting large positions, giving subscribers a peak at the bullish or bearish tilt of the market. It also offers accurate predictions of imminent moves in single stock and index volatility.

Jon started his career as a linebacker for the Chicago Bears, and I can personally attest that he still has a handshake that?s like a steel vice grip. Maybe it was his brute strength that enabled him to work as a pit trader on the Chicago Board of Options Exchange for 22 years, where he was known by his floor call letters of ?DRJ.? He formed Mercury Trading in 1989 and then sold it to the mega hedge fund, Citadel, in 2004.

Jon developed his patented algorithms for Heat Seeker? with his brother Pete, another NFL player (Tampa Bay Buccaneers and the Minnesota Vikings), who like Jon, is a regular face in the financial media.

In order to register for the conference, please click here. There you will find the conference agenda, bios of the speakers, and a picture of my own ugly mug. I look forward to seeing you there.

Cling! Cling!

San Francisco

Trademonster

Jon MajarianJon Najarian

https://www.madhedgefundtrader.com/wp-content/uploads/2013/09/Trademonster.jpg 379 402 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-10-03 01:06:102013-10-03 01:06:10Join the ?Invest like a Monster? San Francisco Trading Conference
Mad Hedge Fund Trader

The Mad Day Trader?s Q4 Targets

Diary, Newsletter

Jim Parker, The Mad Day Trader, has published his targets for a broad range of asset classes for the fourth quarter of 2013. The numbers are the product of his proprietary model, which he has developed over the past 40 years, and generated one of the most outstanding track records in the business. Ignore Jim?s views at your peril!

Jim says that stocks will bottom in coming weeks and begin a run that will take the S&P 500 (SPY) up to 1,730. Break that with conviction, and the next goal will be 1,780. If NASDAQ breaks 3,240, then we could tack on another 100 points very quickly.

Jim is a died-in-the-wool bear on bonds, and sees the entire fixed income space returning to long term normalized yields. It would be wise to sell every serious rally. It is unlikely that the iShares Barclays 20+ Year Treasury ETF (TLT) will rally from today?s $106.20 to above $114.62. Try to establish shorts and sell premium as close to that number as you can get.

The Japanese yen has correctly been a major focus of the foreign exchange market this year. Jim is a bear here as well. His quarterly pivot for the (FXY) is $98.63, and if we break $97.35, much lower targets beckon. He is modestly positive on the euro (FXE), as long as we maintain above $133.50.

Gold has been hammered this year, tracking the Treasury bond market almost 1:1 to the downside, as ?RISK ON? investors flee towards higher yielding instruments. Don?t expect any relief until we definitively break $1,420 on the upside. Stay away until then.

Jim is also negative on oil as long as we don?t break $104.70-$105.30 in the spot, or $38.18 in the (USO). Jim sees copper as weak and could be hit with another selloff.

The grains have been a graveyard this year for traders, as the largest crops in history have come in better than expected. Play the dead cat bounces, and buy every 8%-10% dump for a quick snap back rally.

While the Diary of a Mad Hedge Fund Trader and its Global Trading Dispatch focus on investment over a one week to six-month time frame, Mad Day Trader will exploit moneymaking opportunities over a 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. During normal trading conditions, you should receive two to five market updates and Trade Alerts a day.

As with our existing service, you will receive ticker symbols, entry and exit points, targets, stop losses, and regular real time updates. At the end of each day, a separate short-term model portfolio will be sent to you and posted on the website.

Jim is a 40-year veteran of the financial markets and has long made a living as an independent trader in the pits at the Chicago Mercantile Exchange. He has worked his way up from a junior floor runner, to advisor to some of the world?s largest hedge funds. We are lucky to have him on our team and gain access to his experience, knowledge, and expertise.

I have been following his alerts for the past five years, and his market timing has become an important part of the ?unfair advantage? that I provide readers.

A trading service with this degree of success and sophistication normally costs $20,000 a year. As a client of The Mad Hedge Fund Trader, you can purchase Mad Day Trader alone for $699 per quarter, or $2,000 annually. Or you can buy it as a package together with Global Trading Dispatch, which we call Global Trading Dispatch PRO, for $4,000 per year, a 20% discount to the full retail price...

To learn more about The Mad Day Trader, please visit my website. To subscribe, please click here.

SPY 10-2-13

TLT 10-2-13

USO 10-2-13

GLD 10-2-13

https://www.madhedgefundtrader.com/wp-content/uploads/2013/06/MDT-Logo.jpg 198 610 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-10-03 01:04:562013-10-03 01:04:56The Mad Day Trader?s Q4 Targets
Mad Hedge Fund Trader

An Afternoon with Dr. Paul Ehrlich

Diary, Newsletter

Pack your portfolios with agricultural plays like Potash (POT), Mosaic (MOS), and Agrium (AGU) if Dr. Paul Ehrlich is just partially right about the impending collapse in the world?s food supply. You might even throw in long positions in wheat, corn, soybeans, and rice.

The never dull and often controversial Stanford biology professor told me he expects that global warming is leading to significant changes in world weather patterns that will cause droughts in some of the largest food producing areas, causing massive famines. Food prices will skyrocket, and billions could die. At greatest risk are the big rice producing areas in South Asia, which depend on glacial run off from the Himalayas. If the glaciers melt, this will be gone.

California faces a similar problem if the Sierra snowpack disappears. Rising sea levels displacing 500 million people in low-lying coastal areas is another big problem. One of the 77-year-old professor?s early books ?The Population Bomb? was required reading for me in college in 1970, and I used to drive up from Los Angeles to hear his lectures (followed by the obligatory side trip to the Haight-Ashbury).

Other big risks to the economy are the threat of a third world nuclear war caused by population pressures, and global plagues facilitated by a widespread growth of intercontinental transportation and globalization. And I won?t get into the threat of a giant solar flare frying our electrical grid. ?Super consumption? in the US needs to be reined in where the population is growing the fastest.

If the world adopts an American standard of living, we need four more Earths to supply the needed natural resources. We need to raise the price of all forms of carbon, preferably through taxes, but cap and trade will work too. Population control is the answer to all of these problems, which is best achieved by giving women an education, jobs, and rights, and has already worked well in Europe and Japan.

All sobering food for thought.

DBA 10-2-13

CORN 10-2-13

POT 10-2-13

India - Food

https://www.madhedgefundtrader.com/wp-content/uploads/2013/10/India-Food.jpg 330 463 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-10-03 01:03:182013-10-03 01:03:18An Afternoon with Dr. Paul Ehrlich
Mad Hedge Fund Trader

October 2, 2013

Diary, Newsletter, Summary

Global Market Comments
October 2, 2013
Fiat Lux

Featured Trade:
(TEXAS TEA TAKES A DIVE),
(USO), (UNG), (SCO), (DTO),
(A SPECIAL NOTE ON EXERCISED OPTIONS)

United States Oil (USO)
United States Natural Gas (UNG)
ProShares UltraShort DJ-UBS Crude Oil (SCO)
PowerShares DB Crude Oil Dble Short ETN (DTO)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-10-02 01:05:412013-10-02 01:05:41October 2, 2013
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Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

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