1. The Mad Hedge Fund Trader “The Black Swans Are Back” With John Thomas from San Francisco, CA November 5, 2014 www.madhedgefundtrader.com www.madhedgefundtrader.com

2. Current capital at risk World is Getting Better Risk On (TBT) short Treasury ETF10.00% (BAC) 11/$15-$16 call spread10.00% (SPY) 11/$179-$183 call spread10.00% (BAC) 12/$15-$16 call spread10.00% World is Getting Worse Risk Off total net position40.00% Portfolio Review Running a Small Low Risk Book at the Top of a Massive Move Adding to longs on small Dips

3. Trade Alert Performance Still Another New All Time High! *January Final +3.05%, *July Final +4.18% *February Final +6.41%, *August Final 5.86% *March Final -2.52% *September Final 5.01% *April Final +3.32% *October Final 6.69% *May Final +4.61% * November MTD 0.36% *June Final +4.24% 2014 YTD +41.2%, versus 5% for the Dow, October was the best month of the year! survived the crash! *First 204 weeks of Trading +163.7%!

4. Paid Subscriber Trailing 12 Month Return +64%

5. 47 Months Since Inception Averaged annualized +42%

6. Strategy Outlook-Risk Back On *Surprise Japanese QE is a game changer, signals global QE *Stocks poised to hit new all time highs into yearend *Commodities, oil, gold, silver, base metals, and foreign currencies break to new lows *The bond top is in, reallocation out of bonds into stocks for the next 10 years *Midterm elections on Tuesday, look for brief market correction if Republicans fail to take the Senate, a win is already in the price *The grains finally showing signs of a bottom due to rail car crisis *All other issues are just noise (Ebola, ISIL, Ukraine)

7. Midterm Elections-Gridlock Wins! *Republican win guarantees gridlock for two more years, and the market loves gridlock *There is no 2/3 majority to overrides a presidential veto, so Obama signature is required for anything congress passes *Republicans will take yesterday’s win as a vindication of their policies and run ultra conservative candidates in 2016 *The calendar strongly favors the Democrats in 2016 *This leads to the Democrats taking the House, Senate, and the presidency in 2016 *The good news is that Hillary Clinton is market positive

8. The Market Loves Gridlock! Up 70% in 4 Years

9. The Jim Parker View The Mad Day Trader-On sale for a $1,500 upgrade Technical Set Up of the week - Wait for Thursday ECB Meeting Buy *Risk assets just bottomed again *ECB meets Thursday morning, expect a lot of violence, stay flat ahead Sell Short *(FXE) on every rally (FXY), (YCS) yen could go to Y142 Avoid * John Thomas when he’s wrong

10. The Global Economy- Goldilocks is Back! * US Q3 comes in at a very strong GDP 3.5%, off the back of strong defense spending, deflation is a major factor, Q4 to be better *US company earnings have been telling is this all along, with blowout upside earnings *ADP report hints at strong October nonfarm payroll on Friday *Japan launches a surprise QE, sends asset prices everywhere rocketing, increase monetary expansion from Y60 trillion to Y80 trillion *Japan Government Pension Investment Corp. plans to buy $200 billion in mostly US stocks *Gasoline breaks $3/gallon nationally is another stimulus/tax cut

11. Weekly Jobless Claims - The trend is your Friend -3,000 to 287,000, hugging 14 year lows!

12. Industrial Production is Rising

13. While Consumer Prices Are Falling

14. Bonds-The Top is In *The ten year Treasury ran from 2.30% to 1.86% to 2.22% in just two days! *Quantitative easing is over in the US, but is reborn in Japan and the US *The top in bonds is in for the US *Look for the ten year Treasury yield to break to a new 2.30%-2.60% range and then stay there for a long time *Take profits on (TBT) when the ten year yield hits 2.60% *Deflation is a growing factor in US GDP, dragged down by energy costs *Fed not to raise interest rates until 2016.

15. Ten Year Treasuries (TLT) 2.20% Classic Blow Off Top

16. 30 Year Treasury Yield ($TYX)-Yield 2.84%

17. Junk Bonds (HYG) 5.81% Yield The New Lead Contract-A Classic High Volume Spike Bottom

18. 2X Short Treasuries (TBT) Took Profits on half the 20% position

19. Investment Grade Corporate Bonds (LQD) 3.54% Yield

20. Emerging Market Debt (ELD) 3.56% Yield

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

22. MLP’s (LINE) 11.60% Yield-Smashed by Oil

23. Stocks-Party On *New All time highs, with many short sellers caught out *Japan QE, and massive reallocation out of bonds into stocks were the decisive factors *US corporate earnings upside blowout across the board *Weak bond market give the lead to financials, with (BAC) leading *Yearend rally coming, is now on *(SPY) could add 15% by yearend from the October low, regardless of geopolitics *Volatility peaked at 33%, a stunning return to 14%

24. S&P 500 Long 11/$179-$183 vertical bull call spread stopped out of short $197-$202 call spread

25. Not Expensive

26. Dow Average-The Megaphone is Loud

27. NASDAQ (QQQ)-

28. Europe Hedged Equity (HEDJ)-

29. (VIX)-Yikes! The Top is In

30. Russell 2000 (IWM)-Breaking the Downtrend

31. Technology Sector SPDR (XLK), (ROM)

32. Industrials Sector SPDR (XLI)

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

34. Financial Select SPDR (XLF)

35. Consumer Discretionary SPDR (XLY)

36. Apple (AAPL) –

37. Google (GOOGL)- It Was a Great Entry Point for the Long Term

38. Bank of America (BAC)- long the 11/$15-$16 vertical bull call spread-run to expiration long the 12/$15-$16 vertical bull call spread

39. China (FXI)-

40. Japan (DXJ)-Gone Ballistic on Shock and Awe QE

41. Yen versus Nikkei

42. 25 Year Nikkei

43. Emerging Markets (EFA)-

44. India (EPI) –

45. Foreign Currencies-King Dollar Rules *Billions of dollars are pouring into the US seeking higher investment returns on all asset classes *Dollar outflows shrinking thanks to energy price collapse *BOJ moves prompts biggest gap down in the yen in 14 years *25 banks fail ECB stress test, 12 banks need $12 billion in capital immediately *Japanese and European QE’s looking to decimate their own currencies *Germany caving on harsh monetary policies to save Europe and its huge export markets *Commodity collapse killing the Aussie

46. Euro (FXE)-The Freefall is On took profits on the 11/$127-$129 vertical bear put spread took profits on the 11/$128-$130 vertical bear put spread

47. Long Dollar Index (UUP)

48. British Pound (FXB)-

49. Japanese Yen (FXY)-

50. Short Japanese Yen ETF (YCS)

51. Australian Dollar (FXA) –Missing the Volatility

52. Chinese Yuan (CYB)-

53. Emerging Market Currencies (CEW)

54. Energy-Looking for a Bottom *Every trader looking for a bottom is too early *US oil production rocketing from 6 to 10 million b/d *Gasoline break $3/gallon barrier nationally *Oil collapse tears down natural gas as well *US oil inventories at record highs and building *US energy stocks overpriced relative to oil prices, look for another 10%-20% fall

55. Oil

56. Oil 3 Years

57. United States Oil Fund (USO )

58. Oil Services ETF (OIH) Feeling the Heat

59. Natural Gas (UNG)-

60. Copper-

61. Freeport McMoRan (FCX )

62. Precious Metals-Breakdown! *Gold has ignored every positive seasonal influence *Global QE is terrible news for all precious metals *Flight to safety bid has gone missing in action, everyone is buying Treasury bonds instead *Hard assets becoming worthless, paper is the new gold *Look for new downside targets across the asset class

63. Gold-Targeting $1,000

65. Barrick Gold (ABX)

66. Market Vectors Gold Miners ETF- (GDX) No Friends

67. Silver (SLV)

68. Silver Miners (SIL)

69. Agriculture *Weather still perfect, prices falling, Corn targeting 15 billion bushels, the largest in history *Far month futures now rallying hard, creating a backwardation in the futures market, is price positive *Exacerbated by rail car shortage created by oil demand *The harvest is almost in, 2014 was a disaster *Focus on 2015

70. (CORN) –

71. (SOYB)-Not Much of a Rally

72. Ag Commodities ETF (DBA)

73. Real Estate-No Autumn Revival *August S&P Case Shiller +5.1% YOY, negative YOY comparisons coming *New Home sales have started to fall in September, down 4% YOY, dragged down by buyer focus on the top end of the market. *They are easing on existing homes as well, as more home owners finally get above water on pre crash mortgages *September pending homes sales unchanged, inventory up 6% YOY, financing is the main drag *Is online competition finally entering the real estate market? *Homeownership rate falls to 20 year lows at 64.4%

74. May S&P/Case–Shiller Home Price Index +14% YOY down to +5.1%

75. US Home Construction Index (ITB)

76. Trade Sheet So What Do We Do About All This? *Stocks- buy the dips, with Financials, technology and health care leading, we’re running to new highs *Bonds- sell rallies across all fixed income, the end is here *Commodities-stand aside until global economy recovers *Currencies- sell every Euro rally forever, and the yen too *Precious Metals –stand aside until the $1,000 bottom is in *Volatility-stand aside, the peak is in *The Ags –stand aside until next season *Real estate- stand aside, the dead cat bounce is done

77. Next Strategy Webinar 12:00 Wednesday, November 19, 2014 Live from San Francisco, CA Good Luck and Good Trading !