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Time to Get on the (SPX) Roller Coaster
I think the market’s reaction to a rumored settlement on the debt ceiling was a great “tell” on the short term direction of the financial markets. The S&P 500 popped 20 points, bonds roared by two points, and it was off to the races for commodities. However, gold took a $30 hickey.
To some extent, I am making a political call here. I think that there is a 100% chance that we get an agreement on the debt ceiling by the August 2 deadline because the republicans have unwisely, and some would say recklessly, painted themselves into a corner.
The debt ceiling is the responsibility of the House of Representatives, and using it as a weapon to achieve political gains has never been done before. Reagan did it, Clinton did it, and Bush did it big time. If they fail to take action and the US defaults, all President Obama has to do is suspend payment of Social Security checks and correctly blame it on them.
That would assure a big win for the democrats next year and return to them control of both houses of congress. There is no way the republicans are willing to risk even a remote chance of this. So deal they must, and very soon.
A final agreement could create a short term love fest for equities and take the (SPX) up to the old high of 1,370, and possibly to a new yearly high of 1,400.
This is not exactly a low risk trade. I am not predicating the onset of a whole new bull market here, just a swing up to the upper end of a narrow, tedious, and boring range.
You can expect some volatility as the rumors continue that a deal is on, then off, then on again. But we know that the final answer is “on”, so if you get any big dips, you might want to double down.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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Ever hear of Intrade MHFT?
They have July Debt Ceiling Passage at one in three
You and the NYT DC WS crowd ought to move to Mexico
Used to think MHFT here for comic relief fade trade
Now suspect John Thomas one of ZH staff
Mr Hedge Fund your liberal Cali biases get in the way. Obama can not blame anything
on Repubs because a plan was presented and will be shot down in the Senate.
OFailures, failure to lead is part of the problem. The other is Congress
propensity to spend.
SS checks will still go out because the $ should be going from paychecks directly to
SS Trust fund. If not then that again is a total failure of Congress. In any
event a Congressional plan was presented and shot down in the Senate.
Not Repugs fault.
Hey Mad. It's me. Again.
Still hanging on to that long USD/JPY tip you made several months back...you know, when it was at about 86.
You remember that tip, don't you? You said "buying USD/JPY at 86 is a lock".
This morning its hovering at just over 78.
I don't know what I'm going to do from here, Mad Hedgefund Trader. I leveraged everthing for this trade. I pulled out all my home equity. Then, when it fell to 82, I doubled down via 3 different credit cards.
It's killing me Mad Hedgefund Trader! My wife..uhr...ex-wife...left me after she found out about the home equity extraction. Bitch.
Now credit card companies are hounding me.
I'm so stressed, I spend the day all fetal and shit. I can't leave my house. As a result, I lost my job. Assholes.
So what should I do Mad Hedgefund Trader? Now, more than ever, I need your iconoclastic and out-of-consensus analysis. WHAT-SHOULD-I-DO?
Should I double-down again? If so, wouldn't that be more like a quadruple-down? Gee wiz...Quadrupling-down seems kind of risky. But who knows...maybe it's just more of your iconoclast wisdom.
OK, Mad Hedgefund Trader...I'm gonna do it! Retirement Shmetirement. Gonna get my 401k and put that bad boy to good use. Going LONG USD/JPY some more, baby!
Thanks Mad Hedgefund Trader!
Maybe his next article about how at breakfast he picked eggs out of El-Arian's moustache will help.
You sound like a perfect candidate for a John Thomas (MHFT) "Testimonial"
http://www.madhedgefundtrader.com/july-13-2011-4.html
Huh, well apparently this sell-out assclowns latest advice is to 'jump on the SPX'...probably means he's selling it...no thanks I'd rather watch the wheels suddenly fall off this mess while not on the hurtling Rube Goldbergian rigged contraption itself.
lol! thanks. very good. needed the laugh.
Yeah, long-term there are problems, but I was just thinking to myself the other day, "You know, ES sure looks like it wants to go higher..."
spx 50,000 shares oh ah ? wheres the real table i am confused wheres the us market
everyone take note: mhft is not predicating the onset of a whole new bull market here.
Is that lone star indicative of tripe or unadulterated tripe? Sorry but if the manipulation is as rampant as my eyes, ears and synapses tell me then that little accidental report from the NYT was just a trial balloon to see how many rubes are still left (to sell to). That the 'reaction' is in any way a more reliable trading device than say analyzing chicken entrails is an insult to all those hard working offal analyzers at Bait and Fitch, Mooodies and Our Standards are Poor.
+1 to all previous posts...never heard of this guy before, buy he's smokin' something. Anyone with a newsletter or investment advice to sell should always be taken with a degree of skepticism.
Not to mention that theoretically, Social Security is a Trust fund, that is supposedly fully funded. Obama can't make the decision to suspend payments. The market may pop on a deal, but the logic here is pure bullshit.
Hey Mad,
Buy the dips.....with a stop.....until it doesn't work ! That's it ; That's all. When we break serious support then sell the rallies. Isn't that really all it's about ? If you make me hold a position - I'll hold gold.
Madhedge now reminds me of a beginner broker making cold calls, Robotrader makes more sense than you and your flip flopping calls. Develop a position more in depth than this lame Demican/Republicrat he blames she blames puppet show for children.
"If they fail to take action and the US defaults, all President Obama has to do is suspend payment of Social Security checks and correctly blame it on them."
This would never happen. Too many elected people would end up suicided.
hmmm, republicans from deep red america who vote against raise get re-elected.
Obama gets defeated if debt ceiling is not raised.
Who is in the corner and needs to cave again?
Writer seems to forget that all legislative elections are local, no matter what the national media says.
As a rule, people on Wall Street are the worst politcal forecasters.
The debt ceiling is the responsibility of the House of Representatives, and using it as a weapon to achieve political gains has never been done before. Reagan did it, Clinton did it, and Bush did it big time."
Sorry? That doesn't make sense to me.
DavidC
What happened to the short SPX call from a month ago? You know the one where you advised readers to buy Aug or Sep puts on the SPY?
Just ignore that one? OK, right.
F**king hell, it was only 2 weeks you were calling for prepare for the worse, buy my survival guide s**t.
Talk about a flip flopper. Can't take your stuff seriously. Make a call and stick with it with proof of your conviction, otherwise your input is as worthless as that paper the FED prints.
Whatever madhedge, if its so good, YOU drink it, flip flopper!
Wait what? The message here being to get in on the paper game now that it is 100% a fully gamed piece of shit. Yeah, no thanks.
True colors showing, as well as a total lack of principles...which btw are more important than a weekly S&P trade.
Is it time for ye old madhedgefundtrader to board his lear jet yet? I think so.
sounds like this author will be begging for a personal bailout after a swift reality check on Aug 2 -- unless this poster was Barney Frank, which it does smell like.
so ye olde hedge fund trader says that it's all the house republicans fault playing games even though they were elected in overwhelming numbers by their constituents to stop the spending, and get the usa's fiscal house in order. most of the public can see straight through the teleprompter's games trying to get the house republicans to stiff their constituents, even if the mad hedge fund trader cannot.