The Mad Hedge Fund Trader “Smelling the Roses ”

1. The Mad Hedge Fund Trader“Smelling the Roses ” With John ThomasSan Francisco January 8, 2014www.madhedgefundtrader.com

2. Trade Alert Performance2013 Final *2013 Final +67.45%, compared to 26%for the Dow, beating it by 41.45%*December Final +11.41%*January MTD +3.00%*First 160 weeks of Trading +125.50%*Versus +47% for the Dow AverageA 78% outperformance of the index 75 out of 90 closed trades profitable in 201383% Success Rate in 2013

3. Portfolio Review-Running Into Expirationwatch out for over trading and over confidence! Expiration P&L+8.51% YTD

4. 2013 Final Performance +67.25%!!

5. 37 Months Since Inception+125.5%, Averaged annualized +40.7%

6. Strategy Outlook-Buy the Dips, Risk On Lives *Bull market in risk assets continues well into 2014, but are now vastly over extended, take short term profits*Run entire trading book into January 17 expiration, then reassess*Bonds attempting to break down to knew lows, highs in yields*Yen oversold, needs to consolidate a big move down*Don’t catch the falling knife in gold,the world wants paper assets, bottom isn’t in yet*Emerging markets still unloved, but may bottom soon, will be a rotation play*Commodities looking very cheap, must do well this year

7. The Jim Parker ViewThe Mad Day Trader-On sale for a $1,000 upgradeThe Quarterly calls are out Technical Set Up of the week *Buy buy (GOOG), Priceline (PCLM),and momentum names on dip (AAPL) moving stop down to $518*Sell Short(TLT) sell again on rally after Friday(FXY) $94.50

8. The Global Economy-Ramping Up *Global synchronized recovery still the play for 2014, the US, Europe, China, and Japan all grow together for the first time since 2007*This US could hit 3%-4%, far above consensus expectations*China still stagnating, how much of the 7.5% is real?*Biggest growth surprise could be in Europe, from 0% to 2%*Chinese December services PMI falls from 52.5 to 50.9, 2 ½ year low, sets off Asian growth scare

9. Weekly Jobless Claims-2,000 drop to 339,000

10. December Nonfarm Payrollout Friday, expected in line

11. Bonds-Another Poor Year Ahead *Bear Market continues*Most analysts targeting 3.5% yield on ten year Treasury for 2014, up from 2.95%, could spike to 4%*The “1%” will support this market, slow the descent*No Fed move on interest rates for a year*Another taper will come in the firsthalf, but is already priced in*Sell every rally

12. Ten Year Treasuries (TLT) long the 1/$104-$107 Don’t chase from here,don’t sell into a pit

13. 10 Year Treasury Yield ($TNX)-Yield 2.98%

14. Junk Bonds (HYG) 6.17% Yield

15. 2X Short Treasuries (TBT)-The next leg up has started

16. Investment Grade Corporate Bonds (LQD)3.84% Yield

17. Emerging Market Debt (ELD) 4.18% Yield

18. Municipal Bonds (MUB)-2.93% yield,Mix of AAA, AA, and A rated bonds

19. MLP’s (LINE) 10.2% Yield

20. Stocks – Beating the Tax Man *Tax selling has been the big factor so far this year by shareholder looking to defer taxes due until April, 2015*Biggest falls have been by market leaders, like (XLE) and (AAPL)*Is a temporary move, bull market resumeswhen year end effects end*Traditional New Year rally was pulledforward by December hyper bullishness*Money moving from crap to quality

21. S&P 500 (SPX)-Begging for a Correctionlong the 1/$173-$176 call spread, run into expiration

22. S&P 500 (SPX)-The One Year View

23. Dow Average-Down on the Year

24. NASDAQ (QQQ)

25. (VIX)-

26. Russell 2000 (IWM)

27. Apple (AAPL)-Takes a Hit on tax selling after 48% gain in 6 monthslong the 1/$490-$520 call spread

28. Technology Sector SPDR (XLK), (ROM)long the 1/$33-$35 call spread

29. Cyclicals Sector SPDR (XLY), (UCC)

30. Industrials Sector SPDR (XLI)

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

32. Financial Select SPDR (XLF)long the 1/$19-$21 call spread

33. Financial Select SPDR (XLE)long the 1/$83-$86 call spread

34. Softbank (SFTBY) – losing momentum

35. Gilead Sciences (GILD)long 1/$67.50-$70 call spread

36. Shanghai-

37. (DXJ)-Upside breakout on more aggressive monetary easing,assets up from $300 million to $12 billion in 14 months

38. Emerging Markets (EEM)Trapped by the commodity complex, and rising rates

39. Dollar-Yen is the Big Story *Successful breakdown targets ¥125 in the cash, $75 in the (FXY), will be the big foreign currency trade of 2014, again. BOJ says room for more QE*But needs to consolidate first*Ausie Central Bank Governor still talking it down.*Euro overvalued again at $1.38*Buy the Yuan (CYB) for a long term play

40. Long Dollar Basket (UUP)-Ready for Takeoff?

41. Japanese Yen (FXY)-Consolidation of Major breakdown Nextlong the 1/$95-$98 put spread

42. Short Japanese Yen ETF (YCS)-

43. Euro (FXE)-

44. Australian Dollar (FXA)-Talking down the Aussie again

45. Emerging Market Currencies (CEW)

46. Crude-In balance, no trade *Harsh east coast winter is supporting oil and natural gas*So is a global economic recovery*Prospect of Libya returning to the export market caused recent dip*Geneva Iran negations overhanging the market, but is a multi year affair*Ever present new supplies ofnatural gas

47. United States Oil Fund (USO)

48. Natural Gas (UNG)-Cold weather spike

49. Copper-Dragged up by Improving Global Recovery

50. Freeport McMoRan (FCX)-2013 Losers punished one last time