The Mad Hedge Fund Trader “’The Alibaba Correction”

1. The Mad Hedge Fund Trader“’The Alibaba Correction” With John Thomasfrom San Francisco, CA September 24, 2014www.madhedgefundtrader.com

2. Trade Alert PerformanceStill Another New All Time High! *January Final +3.05%, *July Final +4.18% *February Final +6.41%, *August MTD 5.86%*March Final-2.52% *September+0.94%*April Final +3.32%*May Final +4.61%*June Final +4.24%2014 YTD +30.45%, versus 3%for the Dow,an outperformance of 26%*First 185 weeks of Trading +152.95%!

3. Portfolio Review- The Correction is Here! Expiration P&L+34.26%

4. Trailing 12 Month Return +51.8%%

5. 44 Months Since Inception-50 BP Short of All Time High+152.95%, Averaged annualized +39.8%

6. Strategy Outlook-Risk is Still On *Global bonds certainly peaked last week on ECB move*Alibaba brought “RISK OFF” move across asset classes*Now Alibaba is looming over global capital markets, triggering $20 billion in reallocations*Initial ECB QE fails, warning of more to come*Strong US dollar demolishing commoditiesacross the board, including gold, silver, oil, metals, and the ags

7. The Jim Parker ViewThe Mad Day Trader-On sale for a $1,500 upgrade Technical Set Up of the week Buy *The dollar in any formSell Short – *all foreign currencies*Oil above $92.60*Treasury bonds higher up Avoid –*Emerging markets blowing up*Precious metals, too low to short

8. The Global Economy-QE is Breaking Out All Over *Fed is having to over stimulate the US to offset new weakness in Europe and Japan*QE cut by $15 billion a month, to end next month*August CPI at -0.20% means deflation has arrived!*US Q2 GDP growth at 4.2% is hotter than hot, may get revised up more!*August University of Michigan Consumer Sentiment leaps from 82.5 to 84.6*China launches its own QE, adds $81 billion in liquidity to 5 largest banks, cuts short term interest rates

9. Weekly Jobless Claims-The trend is your Friend-36,000 to 280,000, Touching new 14 year lows!

10. Bonds-Welcome to the new range *Highs for the year were certainly put in for for Europe and the US last month, welcome to the new 2.40%-2.60% range for ten year Treasuries*QE cut by $15 billion a month, to end next month*Profit taking hits (TBT)*Fed tapers quantitative easing to zero in next month, but interest rates rises not until late 2015early 2016*New trade of the year is to Switch out of bonds*Huge rally in (JNK) vaporizes

11. Ten Year Treasuries (TLT) 2.54%head and shoulders setting up?

12. 30 Year Treasury Yield ($TYX)-Yield 3.25%Inverse Head and Shoulders setting Up?

13. Junk Bonds (HYG) 5.70% Yield

14. 2X Short Treasuries (TBT)Got Out at Cost to Buy Back Lower

15. Investment Grade Corporate Bonds (LQD)3.49% Yield

16. Emerging Market Debt (ELD) 3.30% Yield

17. Municipal Bonds (MUB)-2.88% yield,Mix of AAA, AA, and A rated bonds

18. MLP’s (LINE) 9.40% Yield-Holding Up Against Falling Oil

20. Stocks-Alibaba Sucks the Oxygen out of the Market *10 IPO’s scheduled for this week*Alibaba doesn’t qualify for any index funds, Cayman Islands domicile*During last two tightening cycles S&P 500 earnings rose 71%, takes us to $200/share, (SPX) to 3,420*Corporate buy backs major driver his yeardown -27% QOQ*77% of corporate free cash flow beingused to buy back stock in 2014*Rising interest rates mean the next movewill be in the banks

21. S&P 500

22. Dow Average

23. NASDAQ (QQQ)-

24. Europe Hedged Equity (HEDJ)-Weak Euro Helping Stocks

25. (VIX)-Probing top end of range

26. Russell 2000 (IWM)-Targeting $108Long the 11/$117-$120 put spread

27. Technology Sector SPDR (XLK), (ROM)Watch Out for an Apple Drag!

28. Industrials Sector SPDR (XLI)

29. Health Care Sector SPDR (XLV), (RXL)

30. Financial Select SPDR (XLF)

31. Goldman Sachs (GS) Upside Breakout

32. Apple (AAPL) – We got the Run to New Highs10 million iPhone Sales in the First Weekend! $240 in parts

33. Google (GOOGL)

34. Stock of the Week-Alibaba (BABA) *Don’t buy the Euphoria-Pros expect stock to fall, is why no Softbank rally, up 38% from IPO price, no money left for traders*30 X PE multiple high for for a Chinese stock*No dividend increases volatility*50% of allocation to only 25 accounts, instead of thousands, create artificial demand, none for hedge funds*Green Shoe added 15% to supply*Can’t enter ETF’s for months or years*Yahoo to sell to reinvigorate core business

35. GT Advanced Technologies (GTAT)No Sapphire for iPhone 6

36. Solar ETF (TAN)

37. China-The Upside breakout is Here!

38. Japan (DXJ)-Collapsing Yen Drives Upside breakout

39. Emerging Markets (EEM)-Rising rates a killer

40. India (EPI) –

42. Foreign Currencies-King Dollar Rules! *First tranche of Euro QE a complete failure, only 82 billion of 300 billion in offered loans taking down, so more aggressive QE to come, Draghi promising 2% inflation, up from zero-Sell Euro!*Medium term target of $127 hit, next comes $125, $120, and eventually $1.00*Scotland votes against independence 55-45, rallying the pound*Yen in freefall, but over due for a bounce,sell next rally!*Dollar hits new multiyear high on risingrates, flight to safety, and strongereconomic growth

43. Euro (FXE)-The Freefall is Onlong the 10/%128-$130 put spread

44. Long Dollar Index (UUP) – Euro and Yen Collapse Great for Dollar

45. British Pound (FXB)The UK wins, 55-45!

46. Japanese Yen (FXY)-Catching its Breath!

47. Short Japanese Yen ETF (YCS)

48. Australian Dollar (FXA) –Commodity Collapse Finally Bites!

49. Chinese Yuan (CYB)-Only the Yuan is holding up against Uncle Buck

50. Emerging Market Currencies (CEW)