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Phantom of the Market


I won't pretend that all is well in the world or that the worst is behind us.


And in this labyrinth
Where night is blind
The Phantom of the Opera
Is there inside your mind

Good morning and welcome back to the flickering pack. A new day arrives in the city of critters as traders attempt to shake off the jitters. On the heels of a hellacious month, Hoofy held his ground yesterday and planted seeds of something a bit more substantive. The ability to withstand multiple downside probes in the face of funky financials emboldened bovine around the world as we selfishly slept.
Europe, Asia, India, Stockholm, metals, crude--it's synchronized swimming at its finest, a monolithic movement that is the mirror image of the greenback scrimmage. Buckle up, Minyans, with expiration ahead and quarter-end in sight, the flickering ticks promise to put on quite the show!

As ye faithful know, I dipped my wick thick into the throws of the crimson tide on Tuesday. It was an unfamiliar feeling for a guy who's been uber-conscious of the big picture dynamic but I shared my reasoning and will live with the consequences. While I'm leaning long (two legs in the bull costume, skewed to metals and energy), I consciously left my rose-colored glasses at home. I won't pretend that all is well in the world or that the worst is behind us. I'm simply looking to shake some shekels from the tree and pocket them before the Phantom returns to his rightful home.

Who is this Phantom I speak of and what does he want? For me, it's a simple yet unpleasant answer, the type of discussion that nobody wants to have until we actually see his shadow. He is Deflation; painful, all-consuming, watershed Deflation. While the mainstream media monitors inflationary pressures---and yes, this exists in some corners of the economy--this particular Phantom won't discriminate between victims. That's the risk to the whole enchilada and why the world has deflated over the last month. We may not be seeing actual deflation, mind you, but the global pffft! is a function of pricing in the probability that it will rear its ugly head.

Over the last few years, I've communicated my belief that metals and energy will outperform tech and financials. And I continue to feel that this is a high probability outcome. To make intelligent and proactive financial decisions, however, we must assimilate the entire spectrum of potential outcomes. With all the misinformation, misdirection, confusion and doubletalk, it's no surprise that investors are confused by the world around us. I'm unsure of how or when or if the dreaded Phantom will emerge--or if he already has--but I, for one, prefer to prepare for his potential arrival. How? Capital preservation, limited (if any) debt and a mindful consciousness to appreciate the little things in life.

I'm gonna hop over to the Buzz to focus on thy ticks that flicker. I sincerely hope you have a profitable day and that the shadows of doubt stay far away.


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