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Sour Cream

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What'll you do when you get lonely?
And nobody's waiting by your side
You've been running and hiding much too long
You know it's just your foolish pride


(Eric Clapton)

So, the Philly Fed comes in much worse than expected and I think I actually heard Hoofy yawn in the background. You guys know how much I hate complacency and, as I'm a big believer in communication, I asked our resident bovine to come into my office for a little sit down.

Hoofs: Engine room, more steam!

Toddo: (smiling) Hoofs, I know you have a lot of pent up aggression (and potentially demand), but remember how smug Boo was a few weeks ago? He let his guard down and took a rather substantial spanking. This is not an environment to be glib.

Hoofs: Glib? The only critter that's glib right now is Boo! What does it tell you that the market didn't blink on the Philly Fed number? One of the signs of underlying strength is the ability to absorb bad news. You taught me that.

Toddo: You're right, big fella, and the internals support what you're saying. My only point is that you need to stay on your...hoofs...as we edge our way towards the close. There is certainly an argument to be made that once the "big bad event" (Microsoft) is out of the way, stocks have a clear path higher. But I would note that there's clearly an element of "hope" in the market now and that's been a red flag. I don't mean to rain on your parade, I'm only trying to offer both sides of the coin and offer information that allows you to make more informed decisions.

Hoofs: I hear ya, but this has been a long time coming and I want to enjoy it. Besides, if you look at the market from 40,000 feet, we still have a ton of room to get to the top of the downtrend channel. Don't be so myopic, Toddo...let the market work for you.

Toddo: I see where you're coming from and, perhaps more importantly, I do sense a performance anxiety spreading around the street. That said, the market will do what it can to frustrate the maximum number of people at any given time--so do me a favor and stick with the discipline that got you here. Regardless of how "good" they feel, we're still tickling our resistance levels and flirting with an overbought condition. That doesn't mean they cant rally, it just means there are reasons to keep your right hoof up. Now, please, I have to run into another meeting as we craft our risk profile for tonight.

Hoofs: Thanks Toddo, go do what you gotta. I appreciate you taking the time to share your thoughts. Ruby would be proud.

Toddo: That's the coolest thing I've heard all day. Good luck!

With that, I excused our bullish imagery from my office and sat down with my partners to talk tape. Sometimes, stepping off the trading desk allows you to see the seams on the ball a little better. Pressing and stressing will only hinder the thought process and gripping the handlebars too tight will only make the ride bumpier. Deep breaths, please, as we find our way.

Hope you're all having a most profitable day.
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