John Thomas
06-22-2011, 06:35 PM
Global Market Comments
Macro Millionaire Featured Trades:
(IS THE FAT LADY SINGING AGAIN FOR THE TREASURY BOND MARKET?) (TLT) (TBT)
(OH, HOW THE MIGHTY HAVE FALLEN) (F) (GM) (TM) (TTM)
(MILAN STRATEGY LUNCHEON)
From the desk of John Thomas
The Mad Hedge Fund Trader
Tuesday, June 07, 2011
Is the Fat Lady About to Sing Again for the Treasury Bond Market?
One of my best calls of the year was to pick the bottom of the Treasury bond market in February and pile readers into synthetic long positions by shorting puts in March. That handy little trade brought in a nice 4.51% profit for my model portfolio.
All good things must come to an end. Since my watershed call, the Treasury bond market has rallied an awesome ten points. The long bond ETF (TLT) has soared from 87 to 98. My logic was that a flight to safety would send Treasury bond prices to the moon, and that we have gotten in spades. While the “RISK OFF” trade started for the main indexes, gold, silver, and oil on April 29, it really started in February for copper, banks, and technology two and a half months earlier.
With QE2 ending in a mere 22 days, I think the party is about to end for the bond market. For the last five months, the Federal Reserve has taken down virtually all of the Treasury’s new issues. That amounts to $75 billion a month. That massive quantitate of new bond buying is about to end.
Private US and foreign central banks are not going to be able to make up the difference, no matter how many of their cars, textiles, electronics, toys, and finger traps that we buy. This big problem is that the bond market these days is very much like a Ponzi scheme. Unless there is a steady inflow of new suckers, the entire plan collapses like a house of cards.
So I am going to use this strength in the bond market to sell short some out of the money calls with September strikes. I’ll be picking strike prices that equate to a ten year yield of 2.40%, last year’s low in yields and high in prices. That allows room for a huge, multi decade double top in bond prices to unfold over the next three months and still allow me make money on this trade.
If I can see more confirmation of a double top in the bond markets, then I am going to have a reconciliation with an old flame, the (TBT), the 200% short play on the Treasury market. The only way I can lose money on this trade is for yields to blast through to new 30 year lows, driven by a true double dip recession and an utter collapse in the stock market. The volatility index for the stock market (VIX), stuck at a lowly 17% is telling us that is not going to happen, at least within the next three months, anyway.
9202
9203
9204
9205 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Oh, How the Mighty Have Fallen.
“Exclusive Content for Macro Millionaire Coaching Students Only” Click here for more information on this exclusive service for serious traders. (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
9206 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Can Ford Be Fixed?
The Mad Hedge Fund Trader’s June 20 Milan, Italy Strategy Luncheon.
Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in Milan, Italy on June 20, 2011. A three course lunch will be followed by a 30 minute PowerPoint presentation and a 45 minute question and answer period.
I’ll be giving you my up-to-date views on stocks, bonds, 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 tossed at you to keep your ears ringing for a week. Tickets are available for $349. Or you can pay me six American eagle silver dollars at the door.
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 lunch will be held at a five star hotel in the city center, the details of which will be emailed directly to you with your 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. (http://www.madhedgefundtrader.com/store)
9207 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Quote of the Day
“We have an economy now that is trying to have guns and butter. You can have guns, and you can have butter. But you can’t have a lot of guns and a lot of butter. Until we pull back some of our defense spending, it is impossible for us to get a balanced budget,” said Patricia Chadwick, president of money manager, Ravensgate Partners.
9208
9209 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
9210 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
P.S. If you’d like to sit side by side with me and let me help you multiply your portfolio like a winning hedge-fund manager then I’m happy to mentor you and share my specific trades as I make them just click here to get details on my breakthrough Macro Millionaire coaching program & trading service. (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Macro Millionaire Featured Trades:
(IS THE FAT LADY SINGING AGAIN FOR THE TREASURY BOND MARKET?) (TLT) (TBT)
(OH, HOW THE MIGHTY HAVE FALLEN) (F) (GM) (TM) (TTM)
(MILAN STRATEGY LUNCHEON)
From the desk of John Thomas
The Mad Hedge Fund Trader
Tuesday, June 07, 2011
Is the Fat Lady About to Sing Again for the Treasury Bond Market?
One of my best calls of the year was to pick the bottom of the Treasury bond market in February and pile readers into synthetic long positions by shorting puts in March. That handy little trade brought in a nice 4.51% profit for my model portfolio.
All good things must come to an end. Since my watershed call, the Treasury bond market has rallied an awesome ten points. The long bond ETF (TLT) has soared from 87 to 98. My logic was that a flight to safety would send Treasury bond prices to the moon, and that we have gotten in spades. While the “RISK OFF” trade started for the main indexes, gold, silver, and oil on April 29, it really started in February for copper, banks, and technology two and a half months earlier.
With QE2 ending in a mere 22 days, I think the party is about to end for the bond market. For the last five months, the Federal Reserve has taken down virtually all of the Treasury’s new issues. That amounts to $75 billion a month. That massive quantitate of new bond buying is about to end.
Private US and foreign central banks are not going to be able to make up the difference, no matter how many of their cars, textiles, electronics, toys, and finger traps that we buy. This big problem is that the bond market these days is very much like a Ponzi scheme. Unless there is a steady inflow of new suckers, the entire plan collapses like a house of cards.
So I am going to use this strength in the bond market to sell short some out of the money calls with September strikes. I’ll be picking strike prices that equate to a ten year yield of 2.40%, last year’s low in yields and high in prices. That allows room for a huge, multi decade double top in bond prices to unfold over the next three months and still allow me make money on this trade.
If I can see more confirmation of a double top in the bond markets, then I am going to have a reconciliation with an old flame, the (TBT), the 200% short play on the Treasury market. The only way I can lose money on this trade is for yields to blast through to new 30 year lows, driven by a true double dip recession and an utter collapse in the stock market. The volatility index for the stock market (VIX), stuck at a lowly 17% is telling us that is not going to happen, at least within the next three months, anyway.
9202
9203
9204
9205 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Oh, How the Mighty Have Fallen.
“Exclusive Content for Macro Millionaire Coaching Students Only” Click here for more information on this exclusive service for serious traders. (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
9206 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Can Ford Be Fixed?
The Mad Hedge Fund Trader’s June 20 Milan, Italy Strategy Luncheon.
Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in Milan, Italy on June 20, 2011. A three course lunch will be followed by a 30 minute PowerPoint presentation and a 45 minute question and answer period.
I’ll be giving you my up-to-date views on stocks, bonds, 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 tossed at you to keep your ears ringing for a week. Tickets are available for $349. Or you can pay me six American eagle silver dollars at the door.
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 lunch will be held at a five star hotel in the city center, the details of which will be emailed directly to you with your 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. (http://www.madhedgefundtrader.com/store)
9207 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Quote of the Day
“We have an economy now that is trying to have guns and butter. You can have guns, and you can have butter. But you can’t have a lot of guns and a lot of butter. Until we pull back some of our defense spending, it is impossible for us to get a balanced budget,” said Patricia Chadwick, president of money manager, Ravensgate Partners.
9208
9209 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
9210 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
P.S. If you’d like to sit side by side with me and let me help you multiply your portfolio like a winning hedge-fund manager then I’m happy to mentor you and share my specific trades as I make them just click here to get details on my breakthrough Macro Millionaire coaching program & trading service. (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)