Global Market Comments
June 9, 2014
Fiat Lux
Featured Trade:
(LAST CHANCE TO ATTEND THE JUNE 13-14 INVEST LIKE A MONSTER LAS VEGAS CONFERENCE)
(JULY 18 BARCELONA, SPAIN STRATEGY LUNCHEON)
(THE SOLAR ROAD REVISTED),
(AAPL), (GOOG), (TSLA), (FB), (TWTR)
Apple Inc. (AAPL)
Google Inc. (GOOG)
Tesla Motors, Inc. (TSLA)
Facebook, Inc. (FB)
Twitter, Inc. (TWTR)
Please come to hear me, Mad Hedge Fund Trader John Thomas, as the keynote speaker at the Invest Like a Monster Las Vegas Conference on June 13-14.
I will be joined by many old friends from across the investment spectrum. Jon and Pete Najarian will teach you the tricks of the trade for navigating the ever complex options markets.
Fellow former combat pilot, Chuck Hughes, will go into depth on his own highly successful approach to trading the market. To listen to my in depth interview with him on Hedge Fund Radio, please click here.
Well known market commentator Guy Adami, the Prince of New Jersey, will be there to give his trading insights. So will former hedge fund manager and Yahoo Finance guru Jeff Macke.
The first day will be devoted to three educational sessions that get into the nitty gritty of trading options. The day winds up with a cocktail party with the Najarian Brothers and me.
I will kick off the Saturday session with and extended presentation on the long-term future of the financial markets, to be followed by an extensive question and answer session. I will be followed by an impressive lineup of market veterans.
The event will be held at the Bellagio Hotel on the Strip, my favorite Las Vegas haunt, best known for its spectacular water fountains out front. You may recognize it in the hit movies The Hangover and Ocean?s Eleven.
General admission costs $499 for the two full days. You can buy a VIP ticket for $699, which includes social events with the high and the mighty. It is all great value for money, given the quality and quantity of the information you will obtain. Just click here at http://www.optionmonster.com/events/?refId=186 to buy tickets.
Trademonster?s proprietary program, called Heat Seeker ?, 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, every 33 minutes.
The 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. The firm then distills this ocean of data into the top movers of the day, which he puts up for free on its website, and offers much more detailed analysis through a premium subscription product.
?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 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.
June is a great time to visit Sin City, as the crowds are largely gone and the sun is a wonderfully baking hot. You can ride the neck-breaking roller coaster at the New York New York Hotel, catch one of eight Cirque du Soleil shows, and ride a gondola at the Venetian Hotel.
Or you can try to get a great deal on a luxury item from my buddy, Rick Harrison, at the famous Gold and Silver Pawn, of Pawn Stars fame (good luck with that!).
Just be sure to bring extra sun tan lotion!
Hanging With the Big Dogs in VegasGlobal Market Comments
June 6, 2014
Fiat Lux
Featured Trade:
(JULY 11 SARDINIA, ITALY STRATEGY LUNCHEON)
(THE ECB?S DRAGHI FINALLY USES HIS BAZOOKA),
(FXE), (EUO), (EZU), (EEM), (SPY),
(A COW BASED ECONOMICS LESSON)
CurrencyShares Euro Trust (FXE)
ProShares UltraShort Euro (EUO)
iShares MSCI EMU Index (EZU)
iShares MSCI Emerging Markets (EEM)
SPDR S&P 500 (SPY)
After remaining woefully behind the curve on European monetary policy, European Central Bank president, Mario Draghi, has finally leapt to the forefront.
Specifically, he has announced a package of measures designed to stimulate the beleaguered continental economy that includes generous doses of interest rate cuts and quantitative easing. In short, his has finally pulled that big bazooka out of his pocket that he has been threatening to use for years.
No, he?s not just glad to see you.
The markets were caught unawares of the central banker?s aggressiveness, a character quality that has been sadly lacking in the European leadership since the financial crisis began in 2008. One derivative of the package is to drive short-term European interest rates in to negative numbers. Yes, deposit overnight money in a European bank now, and you have to pay them to take it.
No kidding!
The goal is to punish savers and force them to invest farther down the risk curve, such as through buying stocks. It is a radical move that I have not seen since the mid 1970?s, when the Swiss National Bank was forced to do the same in the wake of the US dollar?s decoupling from gold.
However, depositors quickly got the message, and the negative rates were gone in months.
The move triggered an unrestrained and frenetic global stock market rally. Shares have been mired in a tedious, nerve wracking range for months, awaiting a trigger to break out to one side to another. It looks like this is it, and the new trend is northward.
It also helped that my friend, hedge fund legend David Tepper, gave the green light for stocks (SPY) in the aftermath of the ECB move. That alone was probably worth 80 points of today?s rally, and more in the days to come. All of a sudden, all signals are shouting go!
David?s logic is clear and simple, as he has explained to me in recent weeks. Bring Europe out of hibernation and online, and you get a major boost to global economic growth. Europe is both America and China?s largest export customer. All of a sudden, those US 4% GDP growth rates that I have been shouting about all year don?t seem so pie in the sky.
The ECB?s execrable behavior until now is explained away by their constantly underestimating the severity of the downturn and lacking the institutional tools to do any thing effective, such as an American Style US Treasury and Federal Reserve, with teeth.
Personally, I think they were all just a bunch of wimps. It?s a classic example of a camel being a horse designed by a committee.
I have noticed over the decades that if everyone agrees that a certain scenario is going to play out, it tends to accelerate. We have just experienced the summer doldrums over the last quarter. Is this the fall rally now?
Perish the thought! I?ve already started packing my bags.
It?s screamingly clear that this is only the opening act of move in the Euro (FXE) down to $1.27. But you don?t want to jump into the market right here. The traders who got this one right have been selling into this meeting since the beginning of March.
Mad Day Trader, Jim Parker, and I tried to short the (FXE) a few times above $137. But the time it spent up there was so fleeting, we couldn?t get the Trade Alerts out there fast enough. This is a year when you don?t chase trades, or you will be sorely punished. So we kept our discipline and stayed away.
That said any strength in the Euro should be sold into for the next several months. That window may already be opening. After diving on the news, the Euro then rallied hard as the early players took profits so they could take a long summer vacation. It was a classic ?buy the rumor, sell the news? move.
The currency isn?t the only way to play the ECB?s sudden conversion to religion. You can expect continental stock markets (EZU) to outperform the US for the rest of 2014, especially the long suffering southern European ones, the biggest beneficiaries of the ECB action.
If I am right in my assumption that US bond markets peaked last week, then so have emerging market shares (EEM). It might be prudent to take profits in those marginal markets, and plow the money back into Europe stocks (EZU).
Finally!
All of a Sudden All Signals Are Flashing Go!Global Market Comments
June 5, 2014
Fiat Lux
Featured Trade:
(JULY 7 ROME, ITALY STRATEGY LUNCHEON)
(IS CYTRX (CYTR) ANOTHER TEN BAGGER?),
(CYTR), (TSLA), (BIDU), (MCP), (LNG), (DNA),
(AN EVENING WITH ?GOVERNMENT MOTORS?), (GM)
CytRx Corporation (CYTR)
Tesla Motors, Inc. (TSLA)
Baidu, Inc. (BIDU)
Molycorp, Inc. (MCP)
Cheniere Energy, Inc. (LNG)
Genentech, Inc (DNA)
General Motors Company (GM)
If there is one complaint about the Diary of a Mad Hedge Fund Trader, it is that I am too short term in my orientation. My response is that this is the only way you can obtain a 138% trading return in 3 ? years. I can skim off the cream when others can?t.
There is a reason why we are the only investment newsletter that publishes our performance on a daily basis. Basically, all our competitors lose money for their readers. It?s a lot like those Japanese restaurants that display plastic models of their food in the front window.
Still, I like to throw readers ten baggers when I find them. Long-term followers get that warm and fuzzy feeling when I mention Baidu (BIDU) ($12 to $190), Cheniere Energy (LNG) ($5 to $68), Molycorp ($12 to $80), and Tesla (TSLA) ($16 to $260) for a good reason.
Well, I found another ten bagger, one you can just buy and forget about for the next three to five years. I discovered this jewel at the SALT conference in Las Vegas last month organized by my friend, Anthony Scaramucci (click here for ?The Report on the 6th Annual Skybridge Alternatives (SALT) Conference?).
At the keynote dinner, I randomly picked a table near the stage. One of the couples next to me wore a UCLA pin from where she graduated, prompting a discussion of the Golden age of Bruin basketball and the salad days of? legends John Wooden and Bill Walton (four perfect 30-0 seasons and an 88 game winning streak!).
I casually mentioned I was there as a cancer researcher and DNA scientist during the early 1970?s, and graduated in biochemistry. The ears perked up, and the dam broke.
The gentleman I was dining with turned out to be the CEO of CytRx Corp. (CYTR) a revolutionary innovator in the chemotherapy field. Through a top secret, patented chemical reaction, their chemists can add an acid sensitive linker molecule to pre existing generic chemotherapy drug.
That enables the drug to only kill the cancer cells and not the rest of you as well, eliminating side effects, and permitting a substantial ramping up of the dosage. I worked out the chemistry in my mind, and quickly figured out that it would work.
The net effect is to install a turbocharger on existing drugs, greatly enhancing their curative effects. Stage three trials will be completed by 2016, when the company expects full FDA approval. The company has $125 million in cash and no debt.
I lost a wife to cancer 12 years ago, and received a crash update on the state of the science then. I have been following it ever since, awaiting my turn. If CytRx is able to pass the FDA gauntlet, then they have found the Holy Grail. Best of all, the shares have just suffered a 67% pullback, thanks to the spring biotech meltdown.
To learn more about the company and obtain the details, please visit their website: ?http://www.cytrx.com .
Curing of cancer during the 2020?s is a major part of my Golden Age scenario for the coming decade (click here for ?Here Comes the Next Golden Age?).
The kicker here is that there is not just one, but hundreds of companies developing ground-breaking treatments that will come out in the years ahead, many of them just across the bridge from me. This should collapse the cost of health care for the government, and the rest of us as well.
I knew I would live forever!
Remember that buying the shares of a drug company before final approval is always a crapshoot. The last time I did this was with Genentech?s (DNA) Avastin, because I was dating the senior researcher there at the time (tall, long legs, brilliant).
The shares doubled the day they got the green light, and Bank of America flipped from a ?SELL? to a ?BUY? recommendation for the stock on top of a $30 move, tail between legs. That was good.
As we parted ways, the CEO even pushed over his desert, from which his doctor forbade him for health reasons. I gobbled that up as well.
Is CytRx (CYTR) Another Ten Bagger?Global Market Comments
June 3, 2014
Fiat Lux
Featured Trade:
(JUNE 4 GLOBAL STRATEGY WEBINAR),
(JUNE 23 LONDON STRATEGY LUNCHEON),
(THERE ARE NO GURUS),
(THE COST OF CLEAN COAL),
(KOL), (UNG), (PCE), (BTU), (JOY)
Market Vectors Coal ETF (KOL)
United States Natural Gas (UNG)
PG&E Corporation (PCG)
Peabody Energy Corp. (BTU)
Joy Global, Inc. (JOY)
Global Market Comments
June 2, 2014
Fiat Lux
Featured Trade:
(MAD HEDGE FUND TRADER PUNCHES THROUGH TO NEW ALL TIME HIGH),
(AAPL), (GOOG), (TLT), (FXY),
(JUNE 17 NEW YORK STRATEGY LUNCHEON),
(TESTIMONIAL)
Apple Inc. (AAPL)
Google Inc. (GOOG)
iShares 20+ Year Treasury Bond (TLT)
CurrencyShares Japanese Yen Trust (FXY)
The industry beating performance of the Mad Hedge Fund Trader?s Trade Alert Service has finally punched through to a new all time high for the first time in seven weeks.
The total return for my followers so far in 2014 has reached 15.50%, compared to a feeble 1.3% for the Dow Average during the same period. May alone is up a blistering 4.61%.
I managed to pull this off during some of the most difficult trading conditions in market history. Turnover across all asset classes is hitting decade lows (see chart below), and volatility has crashed through the floor.
The three and a half year return is now at an amazing 138%, compared to a far more modest increase for the Dow Average during the same period of only 34%.
That brings my averaged annualized return up to 39.40%. Not bad in this zero interest rate world. It appears better to reach for capital gains than the paltry yields out there.
This has been the profit since my groundbreaking trade mentoring service was first launched in 2010. Thousands of followers now earn a full time living solely from my Trade Alerts, a development of which I am immensely proud of.
Like most of the industry, I expected May to be a poor month for risk assets. The market has had a tremendous run over the last two years, and the spring historically heralds a period of seasonal weakness.
It was not to be.
One of the toughest things to do in this business is to admit you?re wrong, and then execute an immediate risk reversal in your portfolio.
In the end, the failure of the market to fall meant that it could only go up. We got additional help from month end window dressing, calming events in the Ukraine, and an imminent 7:1 share split at Apple. A massive short squeeze in the Treasury bond market added further fuel to the fire.
That?s all I needed to pile into long positions in Apple (AAPL) and Google (GOOG), and short positions in the Japanese yen (FXY) and the Treasury bond market (TLT). Every Trade Alert I sent out to readers turned immediately profitable.
Quite a few followers were able to move fast enough to cash in on the move. To read the plaudits yourself, please go to my Testimonials page. They are all real, and new ones come in almost every day.
My esteemed colleague, Mad Day Trader Jim Parker, was no small part of this success. Since the market became technically and momentum driven, I have been confirming with him before sending out every Trade Alert. Together, our success rate is 100%.
What would you expect with a combined 85 years of market experience between the two of us? Followers are laughing all the way to the bank.
Don?t forget that Jim clocked an amazing 2013 with a staggering 374% trading profit. That was just for an eight-month year!
The Opening Bell With Jim Parker, a quickie webinar giving followers an instant snapshot of the market opening every day, has been an overwhelming success. Many customers have already reported dramatic improvements in their trading results.
Watch this space, because the crack team at Mad Hedge Fund Trader has more new products and services cooking in the oven. You?ll hear about them as soon as they are out of beta testing. Our business is booming, so I am plowing profits back in to enhance our added value for you.
The coming year 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 by the end of 2014.
Global Trading Dispatch, my highly innovative and successful trade-mentoring program, earned a net return for readers of 40.17% in 2011, 14.87% in 2012, and 67.45% in 2013.
Our flagship product, Mad Hedge Fund Trader PRO, costs $4,500 a year. It includes my Global Trading Dispatch, my trade alert service and daily newsletter. You get a real-time trading portfolio, an enormous research database, and live biweekly strategy webinars. You also get Jim Parker?s Mad Day Trader service and The Opening Bell with Jim Parker.
To subscribe, please go to my website at www.madhedgefundtrader.com, find the ?Global Trading Dispatch? or ?Mad Hedge Fund Trader PRO? box on the right, and click on the blue ?SUBSCRIBE NOW? button.
The Gunslinger For Hire
Come join Mad Day Trader Jim Parker and I for lunch at the Mad Hedge Fund Trader?s Global Strategy Luncheon, which we will be conducting in New York, NY on Tuesday, June 17, 2014. An excellent three course lunch will be provided. A PowerPoint presentation will be followed by an extended question and answer period.
I?ll be giving you my up to date view on stocks, bonds, foreign currencies, commodities, precious metals, and real estate. And to keep you in suspense, I?ll be throwing a few surprises out there too. Enough charts, tables, graphs, and statistics will be thrown at you to keep your ears ringing for a week. Tickets are available for $248.
The formal luncheon will run from 12:00 to 2:00 PM. I?ll be arriving an hour early 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 event will be held at a prestigious private club on Central Park South, the details of which will be emailed to you 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.
