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The October Harvest?

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May peace be with you!

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Because I'm still in love with you
I want to see you dance again
Because I'm still in love with you
On this harvest moon.


(Neil Young)


The afternoon fray is flicking away as the critters all search for something to say. Indeed, after Friday's love-in, traders bound into the office looking for further fireworks. What they got--and what they continue to get--is a series of false starts and stutter steps. Welcome to the fourth quarter, cookie, where every trade counts and the tension just mounts.

The dichotomy that we face is a function of what we see vs. what we don't. With the cyclicals, trannies, small caps, semis, nets and breadth all acting jazzy, the natural inclination is to climb aboard the upside express. The caveat to that blind bet is a "pit in your stomach" combination of widespread complacency and geopolitical jitters. With the election ticking closer, we know, the risk of an unpleasant surprise upticks in kind.

That's not to say that we should run scared. Anyone who traded with duct-tape bound paws will tell you that fear is a necessary precursor of any legitimate wall of worry. The troubling difference this time 'round is that fear, as measured by the volatility indices, is at nine-year lows. So while nobody seems to believe the upside (bullish), there is a more prevalent theme of apathy in motion. That never matters until it does, granted, but it's the double edge sword traders are being force fed.

Away from that internal fray, it'll be interesting to see how long the dollar/metal duopoly continues to unwind. The short greenback trade was crowded into the G7 and my sense is that today's traction is a function of the hedge fund hot potato. You all know my thoughts in the big picture--I think we'll all be walking around with small sacks of silver--but the near-term is muddled (and likely has more room). That tetherball vibe also applies to crude, which I think is too loved in the short-term but not respected enough in the longer-term.

The overnight catalyst calendar is quiet although more than one tech company has prolly added "accounts receivables" to their speed dial. The action will pick up as we trudge ahead as earnings come down the pipe and Beeks readies the orange crop report. And lest we forget, Mr. Raines will pour into Washington on Wednesday to explain himself to the powers that be. Shocker, I know, but it should make for interesting reality TV.

Fare ye well into the bell and have a peaceful eve.

R.P.
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