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Jed's Not Dead Yet, Baby...

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The all-important crude $110 level approaches.

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We can't sneak into the weekend without a shout out to the Gimp.

I'm thinking about that little red ball myself.

You know.... crude, bouncing down the path of deflation.

What did you think I was going to say?

Besides, Zed was the the dead one--Jed is merely injured after being on the wrong end of a bear attack.

Meanwhile, the other Jed, Mr. Clampant of Texas Tea fame, is rubbing his hands together in anxious anticipation.

Crude $110 is approaching--something we've been eyeing for some time--and now that T. Boone has spoken, it's a level of all the more lore.

I'll be nibbling on some energy exposure as crude approaches this defined risk level. I do so with a very important contextual caveat in mind.

I've been dollar bullish as a function of our Ten Themes and this is again a counter-trend trade.

My big-picture expectation is that the dollar will rally and asset classes will deflate as markets delever and debt is destroyed. In that scenario, commodities and equities will go down together as perception catches up with the reality that slower global growth is afoot.

As that destination pales in comparison to the path that we take to get there and we can measure risk to achieve incremental reward. That's the plan, Stan, and it only works if discipline trumps conviction. Stops under crude $110 are warranted as I continue to vibe prices below par into the election and perhaps lower still from there.

A broader, more powerful secular upturn for commodities will one day arrive and serve as the foundation for a legitimate global recovery. It will be Outside-In and led from abroad and everything everyone is waiting for and more.

Globalization isn't dead, my friends, Jed and Zed just need to shake out the fat and inefficiencies, much as the prophecy of the Internet did before it came to fruition.

Fare ye well and enjoy the requisite two-day respite. You've surely earned it, my friends, and the purpose of the journey is the journey itself.

R.P.

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