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Turkey Trot

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Exercise discipline today instead of tomorrow!

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Good morning and welcome back to the gobble shack. Nerves can be heard throughout the 'Ville as critters stand up and turkeys sit still. It's uber-important they remain stable as a single wrong move will earn them the table! "You think that it's hard being a bear?" asked the T-bird that we call Pierre, "try waiting around in a state of despair while tables are set and the stuffing's prepared!" Will the bovine opine to feast on this fowl while Boo and his crew all sit there and growl? We'll know soon enough as we get off our rump and welcome to town another large Hump!

We power up this frisky pup with Thanksgiving knocking loudly at the door. The tension of late has been exceptional although you couldn't tell if you're lugging volatility. What's more, looking at a chart of the fear factor (VXO), some nasty dandruff has formed that has chartists on high alert. The implications aren't linear but the possibility is daunting: single digit vols. If push leads to a conventional shove, the Matador Crowd may be freshly enthused. It's an element more than a catalyst, but it snuck onto my radar and I wanted to share.

The current dynamic can be summed up quite simply. Boo is eyeing a price/earnings ratio that can legally drive (vs. historical average of 12), massive debt on the consumer level and twin deficits for the government, giddy--almost obnoxious--sentiment, a melty dollar (not necessarily equity negative but an input) and a market that was never allowed to sober up after the punch drunk bubble love. Hoofy, for his part, goes along and gets along. As long as the liquidity is there and alternatives are bare, he'll ride the tide rather than step aside. If it ain't broke, he figures, investors will remain fixated.

I entered into a metaphorical posture yesterday morning as I sensed a trap door and had definable risk (recent highs). The timing was impeccable but the follow-through was unmotivated. The action in the nets and nuts, coupled with stubborn internals and late day accommodation from crude, pressed the averages back towards technical nirvana. We're not there yet (and it's but one of four primary metrics) but the set-up is in jeopardy. Therein lies the disconnect between big pictures and short horizons and why it's important to recognize the distinction.

The perception that will dictate reality is whether the last few weeks have been a churny turn or a pause that refreshes. As is often the case in our dynamic evolvement, the reactive rationalization will take its cue from the charts. S&P 1188 and NDX 1580ish are levels to watch as a push through that zone will surely wake some folks up. The combination of "seasonal tendencies" and Google dependencies (GOOG:NASD) (up 12 on a Goldman push) will likely start the day in the green. As we edge through the session, our mainstay tells will help pave the way through the thinning fray.

I'm gonna spend Friday restin' and digestin' but want offer my sincerest gratitude to my fellow professors. Minyanville is, above all else, a platform. A creative platform but simply a stage. What makes it special is the wisdom, perspective and style of those who show up each day and selflessly contribute their time and effort. Where other websites offer advice or report the news, we're provoking thought and providing interpretation. We would have more subscribers if we followed the script, but our roots run deep and our mission is true. I am truly humbled to be surrounded by such a special family and have much to be thankful for as we sit back to reflect.

Good luck today.


R.P.

No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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