the webinar will begin at 12:00 pm est
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Please Stand By for John Thomas Wednesday, February, 2013, San Francisco, CA Global Trading Dispatch. The Webinar will begin at 12:00 pm EST. The Mad Hedge Fund Trader “Global Synchronized Recovery”. Diary of a Mad Hedge Fund Trader San Francisco, February 6, 2013 www.madhedgefundtrader.com. - PowerPoint PPT PresentationTRANSCRIPT
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Please Stand By forJohn Thomas
Wednesday, February, 2013, San Francisco, CAGlobal Trading Dispatch
The Webinar will begin at 12:00 pm EST
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The Mad Hedge Fund Trader“Global Synchronized Recovery”
Diary of a Mad Hedge Fund Trader
San Francisco, February 6, 2013www.madhedgefundtrader.com
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MHFT Global Strategy LuncheonsBuy tickets at www.madhedgefundtrader.com
2013 Schedule
April 12 San FranciscoApril 19 ChicagoJune 27 New YorkJuly 1 LondonJuly 4 AmsterdamJuly 8 BerlinJuly 9 FrankfurtJuly 18 Zermatt
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MHFT Global Strategy LuncheonsBuy tickets at www.madhedgefundtrader.com
ChicagoApril 19
San FranciscoApril 12
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Trade Alert PerformanceHottest new year start in many years
*January +16.75%, February +4.22%
*2013 YTD +21%, compared to 6.7%for the Dow, beating it by 14.3%
*First 112 weeks of Trading +76%*Versus +7% for the Dow AverageA 69% outperformance of the index106 out of 153 closed trades profitable
69% success rate on closed trades
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Portfolio Review-Running a MaximumAggressive Book
1234567
Risk On
(SPY) 3/$142-$147 call spread 10.00%(SPY) 3/$140-$145 call spread 30.00%
(IWM) 3/$82-$86 call spread 20.00%(IWM) 3/$84-87 call spread 10.00%(F) 3/$11-$12 call spread 10.00%
Risk Off
(FXY) 3/$110-$115 put spread -20.00%(SPY) 3/$155-$158 puts spread -20.00%
total net position 40.00%
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Performance Since Inception-Gone Ballistic+38% Average Annualized Return
12/1/10
12/28/10
1/24/11
2/20/1
1
3/19/1
1
4/15/1
1
5/12/1
1
6/8/11
7/5/11
8/1/11
8/28/1
1
9/24/1
1
10/21/11
11/17/11
12/14/11
1/10/12
2/6/12
3/4/12
3/31/1
2
4/27/1
2
5/24/1
2
6/20/12
7/17/1
2
8/13/12
9/9/12
10/6/12
11/2/12
11/29/12
12/26/12
1/22/1
30.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
Series1
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The Economy Is Red Hot
*Global synchronized recovery in play
*All major PMI’s over 50,January Chicago PMI 50.0 to 55.6
*December durable goods red hot at 4.6%
*New Home price +13.3% YOY
*Weekly jobless claims +38,000 to 368,000
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Weekly Jobless Claims38,000 increase to 368,000 is a new 5 year low
statistical anomalies at work
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Bonds-the slide has begunthe 60 year bull market is over
Negative returns in 2013
*Bond to stock reallocation is the big trade of 2013
*No crash, look for a slow grind
*$85 billion a month in bond buyingis still huge support
*New range is 1.80%-2.50% range
*Sell every substantial rally in Treasuries,corporates, and municipals
*Stock market will support junk,currencies will support sovereigns
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(TLT)
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(TLT)-2 Year
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Short Treasuries (TBT)See the 1:4 reverse Split—5% annual cost of carry
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Junk Bonds (HYG)
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Municipal Bonds (MUB)-3% yield,Mix of AAA, AA, and A rated bonds
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Stocks-Running to the Finish line1,600 here we come
*Look for sideways chop in February,then run to 1,572 in March
*Biggest equity fund inflows in 20 years,$400 bill out, $20 billion back in last 4 years
*Hedge funds running biggest long in a year
*Bond/equity reallocation has only just started*Q4, 2012 earnings better than expected
*Setting up the 2013 top-don’t forget to sell “Sell in May, and go away”, Part 5
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(SPY)-Long the 3/$140-$145 call spreadLong the 3/$142-$147 call spread
Long 3/$155-$158 put spread
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(SPX)-The 30,000 viewFail here
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The Next TradeMarch $155-$158 Bear Put Spread,
Then $158-$161 and $161-$164*Profits in at all price points below $155 by March 15,or 23 trading days
*Profits in modestly rising, sideways, or falling market
*Mitigates some downside risk
*10% weighting =($0.30 X 100 X 37) = $1,110, or 1.11% for the notional $100,000 model portfolio, 100% = 11.1% a month
*Could be our core trade March-August
*We are closer to the top of the four year move than the bottom
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(QQQ)-Gone to Sleep,Awaiting a rotation
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(VIX)-Dying a slow deathheaded for the 9% handle
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(AAPL)-dead in the water,putting in a bottom
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(AIG)-Kaching!
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(FCX)-double kaching!
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(BAC)-Buy the Dip
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Russell 2000 (IWM)Long the 3/$82-$86 call spreadLong the 3/$84-$87 call spread
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Shanghai-Still on Fire
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China (FXI)
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Japan Nikkei-up 32% since October
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(DXJ)-the only way to play JapanUp 37% since October-Nikkei with hedged yen
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The Dollar-¥100 is the target*Yen collapse is dominating the marketssharpest currency move in 20 years,¥76 to ¥94
*Shinzo Abe is pedal to the metal onweakening the yen
*BOJ governor may leave early
*Is the start of a multiyear run to ¥150
*Yen shorts at all time high
*Could get bulk of 2013 move in Q1
*Britain to hold election on EC membership, kills sterling
*Euro running to $1.38
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Long Dollar Basket (UUP)
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Euro (FXE)Looking for a $1.38 top
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Australian Dollar (FXA)-It’s all about China
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Japanese Yen (FXY)-worth the chaselong (FXY) 3/$110-$115 in-the-money bear put spread
200 DayMA
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(YCS)-break to new high
200 Day MA
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Energy-Riding along with global “RISK ON”Targeting $100/barrel
*Acceleration of the US economy is the main driver
*Spill over into China demand
*Saudi Arabia $11 million b/d, Russia $10 m/b/dUS $10 m/b/d. Sorage on Gulf coast is full*US energy boom continues, production up779,000 to 6.5 million barrels, 900,000 barrelsin 2013 expected
*Saudi Arabia $11 million b/d, Russia $10 m/b/dUS $10 m/b/d
*Volatility has collapsed thanks to new balance
*Natural gas stalled with warm weather
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Crude
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(USO)
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Natural Gas
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Copper (CU)-Demonetization risk could cap movesChina growth rate may cap at 8%, not 13%, so slow grind up
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Precious Metals-Gone to sleep
*”RISK ON” is not working for gold
*QE3 monetary expansion still flat
*Who needs life insurance if you are going to live forever?
*Buying a 15 year bull market
*All the action is in the industrial metals ofplatinum and palladium, driven by carindustry forecasts rising from 15 million to 16 million
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Adjusted Monetary Basetells the whole story on precious metals-delayed MBS settlement has delayed QE3
September GoldPeak at $1,798
October Gold Trough$1,665
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Gold
200Day MA
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Silver
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(Platinum) (PPLT)
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Palladium (PALL)-Up 30% since Octoberwas the “Big Tell” for all asset prices
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Ford Motors (F)-the bottom is in53% move from October
long the 3/$11-12 call spread
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The Ags-Buy the dip or sell the rally?
*Beats me, so stand aside
*Still long term bullish, draught continues inAustralia, Brazil, and Ukraine
*Most forecasts for 2013 are positive
*Awaiting next spikeup or down to tell us what to do
*Too many other things to do now
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(CORN)
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Soybeans (SOYB)
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DB Commodities Index ETF (DBC)
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Real Estate-don’t touch the housing stocks
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(PHM)-Up 730% from October, 2012where’s your unfair advantage?
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Trade Sheet“RISK ON” has returned big time
*Stocks- buy the dips, running to a new high*Bonds- sell rallies under a 1.90% yield *Commodities-buy dips, grinding up*Currencies- sell yen on any rallies, buy euro on dips*Precious Metals –stand aside, wait for rebirth*Volatility-stand aside, will bounce along bottom*The ags –has gone dead, low priority*Real estate- rent, don’t buy
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To buy strategy luncheon tickets Please Go towww.madhedgefundtrader.com
Next Strategy Webinar Wednesday, February 20, 2013
Good Luck and Good Trading!