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please stand by for john thomas wednesday march 6 2013 san francisco ca global trading dispatch n.
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  1. Please Stand By forJohn ThomasWednesday, March 6, 2013, San Francisco, CAGlobal Trading Dispatch The Webinar will begin at 12:00 pm EST

  2. The Mad Hedge Fund Trader“The Great Yawn of 2013” Diary of a Mad Hedge Fund TraderSan Francisco, March 6, 2013www.madhedgefundtrader.com

  3. MHFT Global Strategy LuncheonsBuy tickets at www.madhedgefundtrader.com2013 Schedule-Updated April 12San FranciscoApril 19 ChicagoJuly 2 New YorkJuly 8 London, EnglandJuly 12 Amsterdam, Neth.July 16 Berlin, GermanyJuly 18 Frankfurt, GermanyJuly 25 Portofino, ItalyAugust 1 Mykonos, GreeceAugust 9 Zermatt, Switzerland

  4. MHFT Global Strategy LuncheonsBuy tickets at www.madhedgefundtrader.com San FranciscoApril 12 ChicagoApril 19

  5. Trade Alert PerformanceAnother all time high *January +16.75% Dow +6.9% (2.4X) February +10.13% Dow +0.57% (18X) March +0.93%*2013 YTD +27.8%, compared to 8.2%for the Dow, beating it by 19.6%*First 114 weeks of Trading +82.9%*Versus +16.4% for the Dow AverageA 66.5% outperformance of the index 110 out of 157 closed trades profitable70% success rate on closed trades

  6. Portfolio Review-Balancing Out Longs and Shorts, Volatility collapse causing options premiums to shrink,increasing risk and reducing returns of option spread strategyMaximum return if nothing happens

  7. Strategy Outlook-sitting on my handsrun all existing positions to March 15 expiration *Too late to buy, too early to sell*Volatility is too low to sell, but may go lower*Capitulation top in stocks now underway*Roll forward short yen position on any 2 point pop in (FXY)*Can’t establish put spreads in (SPX) or (IWM) as long as upside breakout underway*Only add very deep OTM call spreads with room for a 10% correction*Single stocks too risky because of greater volatility

  8. Performance Year to Date- +27.8%Biggest Performance Burst Since Launch

  9. Performance Since Inception-Gone Hyperbolic+37% Average Annualized Return

  10. The Goldilocks Economy-Not too hot, not too cold-95% of data points positive with no inflation *Global synchronized recovery in play*FEB US car sales +3.7% YOY to 15.4 million*Sequestration bluff is called, -0.25% GDPonly big military states affected20% for VA and MD versus 2% for NY*Europe IFO Index jumps from 104.3 to 107.4*Jan non defense cap spending +6.3%FEBRUARY CHICAGO PMI 55.6 TO 56.8*CPI YOY 1.6% = Goldilocks*Q4 GDP update from -0.1% to +0.1%*China February PMI 52.3 down to 50.44 month low

  11. Weekly Jobless Claims-22,000 plunge to 344,000 is very market positive

  12. Bonds-More of the Same *Ben Bernanke says he may never sell treasurieswill keep the $3.5 trillion he has until maturity*Smart money is shortening duration and de-riskinggreat reallocation into stocks is from cash, not bonds*Sending money abroad looking for non UScorrelated yield curves*$85 billion a month in bond buyingis still huge support*New 10 year Treasury range is 1.80%-2.50%*Sell every substantial rally in Treasuries,corporates,and municipals

  13. (TLT)

  14. Short Treasuries (TBT)See the 1:4 reverse Split—5% annual cost of carry

  15. Municipal Bonds (MUB)-3% yield,Mix of AAA, AA, and A rated bonds

  16. (JNK)-chase for yield continues

  17. Stocks-1,600 Not Looking so “Mad” *Drift up at multiyear highs is incredibly bullish,the dip that never comes*Too many investors frozen out of themarket by the rapid market move*Speed gave individuals a big advantage *M&A Boom is creating equity shortage,takeover at triple 2012 levels*Heinz, AA-US Air, and Comcast deal took $53 billionin stock out of market, today its Office Depot/Office Max*Earnings multiples expanding faster than fundamentals, always ends in tears. Setting up the 2013 top-don’t forget to sell“Sell in May, and go away”, Part 5

  18. Welcome to Fair Value2009 low was a 2X event *Traditional bear market market drops 25% GDP falls -2% lasts 1 year*2007-2009 bear market market fell 57% GDP dropped 4.6% lasted 18 months*Today GDP growing 2% (SPX) earnings of $100 Multiple 15X, versus 9-22 historic range, so overvaluation is nextbut interest rates at 0%, govt. running $800 bil deficit, so higher before lower

  19. Dow Average

  20. (SPY)-Long the 3/$140-$145 call spreadLong 3/$155-$158 put spread

  21. Fail here (SPX)-The 30,000 view

  22. Trading Market Tops-(SPX) H1, 2012 Long Put spreadsandCall Spreads Long PutsandPut Spreads Long CallSpreads VolatilityCollapses

  23. The Next TradeMarch $155-$158 Bear Put Spread, roll out to April $158-$161 and May $161-$164 *Profits in at all price points below $158 by April 19,or 32 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

  24. (QQQ)-Finally Waking Up?Awaiting a rotation-Apple stopped going down, others up

  25. (VIX)-Dying a slow deathheaded for the 9% handle

  26. (AAPL)-dead in the water,putting in a bottom

  27. (BAC)-Buy the Dip

  28. Ford Motors (F)-the bottom is inlong the 3/$11-12 call spread

  29. Russell 2000 (IWM)Long the 3/$82-$86 call spread

  30. Shanghai-Still on Fire

  31. China (FXI)

  32. Japan Nikkei-up 30% since October

  33. (DXJ)-the only way to play Japan-Nikkei with hedged yenY150 targets (DXJ) at $80, up 100%

  34. Welcome Back King Dollar! *Our position weathers an intraday, four handle move from $104 to $108,is the way to manage low volatility markets, the prudence of not chasing*Dollar strength spreads to Euro and sterling*Haruhiko Kuroda appointed new BOJ governor appointment Yen breaks down to ¥94.60, new 3 year low Gives nod to ¥120/$ Yen breaks to new low on Euro/Yen and Ausie/Yencrosses*Is the start of a multiyear run to ¥150*UK debt downgraded from AAAAusterity is not working, sterling craters.*These trends will continue with only minor blips

  35. Long Dollar Basket (UUP)

  36. Euro (FXE)Looking for a $1.38 top

  37. Australian Dollar (FXA)Commodity Bust Hits Ausie

  38. Japanese Yen (FXY)-worth the chaselong (FXY) 3/$110-$115 in-the-money bear put spreaduse any yen strength to roll over into April

  39. (YCS)-break to new high

  40. Energy-Commodity Bust Hits Oil *Acceleration of the US economy is the main driver*Spill over into China demand *Volatility has collapsed thanks to new balance*Rising gasoline prices could add 0.5% to CPI*Commodity weakness has spilled over into oil*Natural gas stuck in narrow range

  41. Crude

  42. (USO)

  43. Natural Gas

  44. Copper (CU)-Demonetization risk could cap movesChina growth rate may cap at 8%, not 13%, so slow grind up

  45. Precious Metals-Ouch! *Technical picture looking terrible*Capitulation sell off below $1,500 setting up*Who needs inflation hedge during deflation?*Monetary expansion still flat suddenlyaccelerated, but gold still dead*Only platinum and palladium held upby car industry

  46. Monetary BaseWeeklyDecember, 2011 to Feb, 2013

  47. Gold 200Day MA

  48. Silver

  49. (Platinum) (PPLT)

  50. Palladium (PALL)