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Blind Man's Bluff

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May peace be with you!

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Since it costs a lot to win
And even more to lose
You and me bound to spend some time
Wond'rin' what to choose

(Grateful Dead)



The afternoon tape is taking shape as the bulls feed the bears more sour grapes. While there has been noticeable supply select financial issues, there's been a more impressive stand of four-letter demand. eBay (EBAY:NASD) up 10%, Broadcom (BRCM:NASD) up 8%, Altera (ALTR:NASD) up 11%...these names have been under steady accumulation all day as fund managers put their hands over each other's fists. I just used the words "rotational hiding" to describe the action to my buddy and it feels as if folks are trying to make their year in a quarter.

I still feel as if we're caught between a self-fulfilling upside ramp and a downside resolution of the massive compression. The outcomes point in polar opposite directions but the potential exists for both. I often say that a bull market and bear market exist every day and in every way and the tallies in the business section represent the residual fallout of that friction. So while the price action is grindy as a result of these elements, the tape is anything but docile.

I wish I had some salient insights on the near-term direction but I don't have a strong feel and won't fabricate one for the sake of content. I continue to believe that there are potholes in the financial fabric (Fannie (FNM:NYSE)) but don't profess to know when they come to light. Suffice to say that I'm treading carefully in my application of risk and will continue to do so until clarity emerges. That doesn't mean I'm not playing (I am), it just means that I'm staying tight and staying nimble.

It's been a relatively quiet day in macro land although the dollar once again stands out on the downside. The commodities (crude, metals) have taken a much deserved breather after the wild swings of the past few sessions. I mentioned in Randoms that I thought the movement in these groups was drawing in players jonsing for volatility and that adds further risk to an already wild equation. In other words, when traders step out of their core competency, the potential for reactive rationalization increases in kind.

Lots on the radar tonight so please let me hop to sharpen my #2's. I sincerely hope you had a fine day and, if not, that you have the balance and perspective to keep your head on straight. In 25 short hours, we'll flip lids and focus on the important stuff--let's get there with some jingle in our jeans and a smile on our face.

Fare ye well into the bell.

R.P.
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