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Wind Burn

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Fare ye well into the bell!

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Against the wind
We were runnin' against the wind
We were young and strong
We were runnin' against the wind

(Bob Seger)


The afternoon flutter continues to mutter as traders sort through the flickering clutter. It's been another snoozer of a session for the equity indices although there has been a fair amount of action under the hood. The semis stand out like a sore thumb as they give back some of the prior week's gains (after failing at their downtrend line). Ditto for the energy patch, although that's no shocker given the slick backdrop of crude.

We've been chattin' on the Buzz about the metal smeltage and potential causes. I opined that this recent slippage may have to do with an "uneventful" Olympics and the unwind of that requisite exposure. Yes, I see the grippage in the dollar but I view that as part of the same trade. And while we must keep our eyes peeled for Carrie unwind, my sense is that the asset class correlation would be more systematic if that was the case.

I wanna take a moment and discuss the minxy environment and the trading dynamic. I was speaking with a close friend who has been moving merchandise for 20 years and he was lamenting about how he "hates the business" now. I've been hearing more and more of these types of comments lately and I empathize with the vibe--the landscape is entirely different than it was ten, even five, years ago. My pal is as good as it gets--and he still coins plenty of shekels--but his voice and energy were devoid of passion.

I told him that he should take a break and turn it off for a couple months to see if his interest once again piques. His response was that he's a self-professed stock junkie and "has nothing else to do." I may be wrong, but I sense that there are a lot of traders out there "trapped" in their jobs with no other developed skill set. Change is scary, I know, particularly if it involves another profession with less monetary reward.

I will offer two simple thoughts: 1) Do what you love and the money will come and 2) There are a lot of hands that will be forced to fold. The first is a proactive decision to improve your quality of life and the other is a simple by-product of the financial weed out. Both will likely transpire in the years ahead, however, as the profit pie shrinks and performance stinks. I know I'm being a bit of a Debbie Downer but pretending it's not coming won't prepare you for when it does.

There will be opportunities to prosper if we're disciplined and dedicated. But you're gonna need to want it more than the next guy and understand that it'll never be as much as you'd like. If you can manage your expectations and adapt your style to navigate an increasingly difficult current, you're on the right track. But don't kid yourself--the easy money has been made. And that, in and of itself, is a pretty frightening thought.

Best of luck into the close.


R.P.
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