The Mad Hedge Fund Trader“Closed for Business”

San Francisco, CA October 9, 2013

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San FranciscoNovember 1

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Trade Alert PerformanceRunning Away From the Pack

*2013 YTD +41.73%, compared to 12%for the Dow, beating it by 30%

*September +6.26%

*First 130 weeks of Trading +96.8%

*Versus +20% for the Dow AverageA 77% outperformance of the index143 out of 202 closed trades profitable

80% Success Rate in 201370.8% success rate on closed trades

Portfolio Review-Waiting to Buy the Next Dipminimize risk while Washington burns

Expiration P&L+43.69% YTD

current capital at risk

Risk On

(SPY) 10/$158-$163 call spread 10.00%

Risk Off

(TLT) 10/$100-$103 call spread -10.00%(FXA) 10/$87-$90 call spread -10.00%

total net position -10.00%

Performance Year to Date +41.43%

Performance Since Inception+34.6% Average Annualized Return

Strategy Outlook-Buy the Dips

*It’s all about Washington, no other issue matters

*Market risk taking has gone to zero, huge spike in 30day Treasury yields

*Cessation of all government data puts traders in the blind

*Major down leg for dollar in the cards,except against the yen

*Market ignores Yellen appointment, but willeventually add 10% to stocks

*Should get resolution around October 17

The Jim Parker ViewThe Mad Day Trader-On sale for a $1,000 upgrade

Summer market still prevails

Technical Set Up of the week

*Buy

No trade, traders on strike, wait it out,do your homework

Emerging markets (VNM), (RSX), (PIN)don’t chase (VIX)

*Sell Short

a yen sale is near

The Economy-Beats Me!Only the foreign data is still coming through, and it is all positive

*Government shutdown starves market of US economic data, when data resumes, it will be plagued with aberrations for the rest of 2013

*Government shutdown to roll 0.5% of GDP growth from Q4 to Q1, making Q1 a red hot 3.5% one

*BOJ Maintains supper accommodative 70 trillion money supply growth target

*Japanese CPI hits 5 year high at 0.8%YOY

*Japan to raise sales tax from 5% to 8%in April, offset with additional stimuluspackage

Weekly Jobless Claims1,000 rise to 307,000, 5 year low

The Last Accurate Number of 2013

ISM Manufacturing Index Surges

Bonds-The Bull Move is Done*Debt ceiling crisis drives Treasury bond prices up and yields down, from 3.0% to 2.60%

*Most up downside moves in yields is done, possible make it to 2.45% of shutdown continues another week, but the next big move is down

*Resolution could take us quickly back to 3%

*The securities facing default have had the biggest price gains over the past month

*The shutdown puts taper off well into 2014, is very bond positive, $85 billion in bond buying continues

Ten Year Treasuries (TLT Yields)long the (TLT) 10/$100-103 bull call spread

7 trading days to expiration

10 Year Treasury Yield ($TNX)

2X Short Treasuries (TBT)-Breaking Down

Emerging Market Debt (ELD) 5.75% Yield

Municipal Bonds (MUB)-2.98% yield,Mix of AAA, AA, and A rated bonds

(JNK)- 6.46% Yield

MLP’s (LINE) 10.9% Yield

Stocks-Awaiting the Starting Gun

*The debt ceiling resolution deadline is October 17, parties will run it up to last second of the last day to maneuver for advantage

*Debt ceiling resolution will quickly send stocks to new all time highs, the performance chase will be on

*Money managers still have cash pouring into equities, must invest by year end

*Consumer cyclicals, technology, health care, and industrials will lead

*Individual Margin debt at all time highs, is peaking a indicator

(SPX)-The 30,000 view

S&P 500 (SPX)-Testing trend supporttargeting 1,620 on downside

NASDAQ (QQQ)

(VIX)-A Pulse Returns

Russell 2000 (IWM)-Led the Upturn

Financials SPDR (XLF)-Leading the downturn

Apple (AAPL)-Throw Back still in Play,Icahn, buyback, Jeffries upgrade, technical's, already trading off

iPhone 6, 11 months away

Technology Sector SPDR (XLK), (ROM)

Industrials Sector SPDR (XLI), (UXI)

Cyclicals Sector SPDR (XLY), (UCC)

Health Care Sector SPDR (XLV), (RXL)

Cyclicals Sector SPDR (XLY)

Tesla (TSLA)-Don’t Touch hereEvening a burning car can’t send the stock down

Shanghai-Double Bottom in place

(DXJ)-Early and Ouch!long the 11/$43-$46 bull call spread

Emerging Markets-Bottom fishing

Dollar-Beaten Up

*Debt ceiling crisis very dollar negative, brought dramatic fall in US interest rates on flight to safety trade

*Loss of interest rate advantage

*End of shutdown will bring massive dollar rally

*Use this dip to sell yen, buy Ausie

*Stand aside on euro until it hits $1.40

Long Dollar Basket (UUP)-

Euro (FXE)-No Trade

Australian Dollar (FXA)-Long the 10/$87-$90 call spread, 7 days to expiration

Japanese Yen (FXY)-The range holds,but is biggest position in the market

(YCS)-For Non Options Players200% Short Yen ETF-head and shoulders top risk

Emerging Market Currencies (CEW)

Energy-Gone Quiet

*Middle East has gone quiet

*Shutdown kills the demand argument

*Supply keeps coming

*Oil hit my first downside target at $102,

*The next target is $92

Crude-

United States Oil Fund (USO)

Natural Gas-First heavy snow fall helps

Copper-Coiling for upside break

Freeport McMoRan (FCX)-looking to get back in

iPath Dow Jones-UBS Copper Sub Index ETN (JJC)

Precious Metals-Short Term,Is the Bottom in?

*Shutdown delivers the best case scenario for precious metals

*Government defaults, but gold falls

*Failure to respond shows we’re still in a bear market,stocks in a bull market

*Shutdown hammers the miners

*Looking for a short term bounce to $1,420 on a medium and long term bear market

Gold-

Gold (GLD)

Barrack Gold (ABX)-

Market Vectors Gold Miners ETF- (GDX)

Silver (SLV)-Silver says we’re still going lower

Agriculture-No Trade Until 2014

*Worst hit sector by government data freeze, farmers flying blind

*Early heavy Midwest snowfall should help prices, delays corn harvest

*Russia cuts back winter wheat plantings 20% to 13 million tonnes

*China returns to market as buyer

*Bottom line: no trade in 2013

(CORN)-still trying to bottom

Wheat (WEAT)

DB Commodities Index ETF (DBC)Dead Cat Bounce

Real Estate-Target Number 1

*End of government loan processes stops 95% of all transactions

*August pending home sales -1.6%

*Will be worst hit sector if Washington stalemate continues

*Housing stocks get slaughtered

June S&P/Case–Shiller Home Price Index

(ITB)-US Home Construction Dow Sub index

Trade Sheet-No Change“RISK ON” Good Into 2014

*Stocks- buy the dips, running to a new yearend high*Bonds- trade the 2.50%-3% range*Commodities-start scaling in on dips*Currencies- sell yen on any rallies, buy Ausie dips*Precious Metals –buy bottom of range only *Volatility-stand aside, is peaking here*The Ags –stay away until next year, no trade*Real estate- no trade

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Good Luck and Good Trading!