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Trust in God but Tie Your Camel

9/30/2016

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In a stunning act of rhetoric: OPEC Agrees to First Oil Cut in Eight Years  The market, unable to see past the incessant jawboning headlines coming out of OPEC for years promptly responded with a $4 pop in crude oil.
This monumental achievement in perception engineering was made 'possible because Iran will be exempt from capping production.'(Bloomberg) 
As oil prices have fallen over the past few years, OPEC producing nations have responded paradoxically by scrambling to make up the loss in revenues with an increase in production. This has led to all-time-highs in oil production globally.

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The lower end of the production target equates to a nearly 750,000 barrel-a-day drop from what OPEC said it pumped in August -- more than half the forecast increase in global oil demand this year.
Brilliant! The cartel is back together. Everything is grand in the biggest commodity manipulation circuit the world has ever known. Back to business as usual, everybody wins, right?
​Not so fast! There is an old Arab Proverb that goes, 'Trust in God but Tie Your Camel.'
There is serious money on the line. It's a game of prisoner dilemma. Work together and you both benefit but cut their throat and gain market share.
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Damned if they do. Damned if they don't.
All things said and done, nothing has been accomplished. Two years and nothing but market drift, marking time sideways reliant on incessantly yapping jawbones losing cartilage fast.
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Will OPEC actually cut? Will the Fed ever raise rates? 
Time will tell. The future will unfold as it does. 
Until then, never forget the wisdom of the ancients...
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The Fed-Bones Connected to the Jaw-Bone

9/25/2016

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Surprise surprise, the Fed didn’t move. Rates stuck at 0.25bps for a year. How quickly the narrative shifts when the market reacts.Open-Mouth-Operations keeping this leaky raft afloat. Raise those rates: Prick the bubble. Clearly, that’s not what they want. Certainly not before an election. Will Criminal-Clinton get crushed by the Trump-Train? Will anything change regardless of the outcome? Stay-Tuned, we shall see. The political sideshow in prime-time.
Yellen said it’s likely they would raise before the end of the year.. I believe that as much as I believe OPEC saying they will cut-production.
Markets held hostage. Stuck in purgatory.
Three things that can pop the Bubble:
  1. Dollar Breakout
  2. Oil New Lows
  3. Bond Market Selloff
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After the Fed moved last December markets experienced a swift sell-off. The Fed responded by immediately reversing their rhetoric from one of 'rate normalization' to one of 'data dependence.'
The Macro continues to deteriorate as the markets stagnate, waiting for the signal to make a move.
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The Magic-Ratio continues to hold it's deflationary trend. 
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OPEC: Worse than the Fed!
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Here's an old chart that really tells the story of when the market rebelled the rhetoric & the Fed Lost Credibility.
Stuck on autopilot 15,000ft in the air. The Feds lost control of the QE Jet. We're quickly running out of fuel...
​How do we land?
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Staying Busy

9/17/2016

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I have had a lot on my plate lately. For starters, I had to deal with the fallout of a certifiably crazy ex-girlfriend. This black-widow basically led me on and played me for eight months taking advantage of my kindness only to stab me in the back in a most spectacular fashion!
Anyways, I learned an incredibly valuable life-lesson from the experience and that's:
​When it comes to crazy women; Avoid them from the very beginning. There are always red-flags.
​Everything you need to know about dealing with women can be summed up in this 100% accurate video.
I urge my readers to refer to this matrix next time you are thinking about chasing that dime.
​There is a direct correlation between hot & crazy. The Danger-Zone is very real and must be avoided at all costs!
With this crazy girl officially out of my life for good I can now return my focus towards the priorities: 
​Bettering myself and making a fortune through finance & markets.

I am currently going back to school at the University of Montana. My plan is:
  • Finish my undergrad degree in Business-Finance.
  • Find a job with a hedge fund or other type of money management institution.
  • I then want to further advance my career and earning potential with CFA certification.
I have now been active in trading and markets since 2013. I know that a career in Finance is right for me. The markets are thrilling. Trading is not easy but I am passionate about markets and I am well aware of the fortunes that can be made through astute, focused, disciplined asset allocation & financial planning.
I will never give up trading but trying to make a living purely trading is a suckers game.
The more intelligent route is having a 'real' job. Safety to fall back on. I went to a meeting of the schools Finance Club and one of the professors claimed that CFAs make an average salary of $250k/yr!
That's what I need to do. I need to gain a foothold in the financial industry and trade on the side.
I will work my hands to the bone, I will do whatever it takes. 
I aim to achieve success & will stop at nothing until I have made my fortune.
​
As far as markets go: for about a month or so I have had on only two positions.
Long: Sugar
Short: Crude Oil
I was flat for a long time but on Friday Sugar broke out surging more than 5%!
Crude has been chopping it's way lower as the constant rumors of oil production cuts slowly lose their effectiveness.

Equities are simply much too dangerous to mess with at this time. The SPX chopped sideways for 2 months only to get obliterated in a day on 'Fed Rate Hike' rumors. Until these Central Banks get out of the markets, I fear that equities will continue to diverge from any semblance of traditional fundamental valuation metrics.
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Stay focused, choose your partners wisely & work your ass off. We want success. Let's make it happen!
2 Comments
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    R. J. Sullivan IV

    Equity Research
    Portfolio Management
    ​Trading

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