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The Big Chill

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Fare ye well into the bell!

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I heard it through the grapevine
Not much longer would you be mine.
Oh I heard it through the grapevine,
Oh and I'm just about to lose my mind.

(Marvin Gaye)


The afternoon thrill is starting to chill as the bears take a swipe at the bulls in the 'Ville. The morning rally was all-inclusive but incremental pockets of crimson have been peeking through all session. It started with Qualcomm (QCOM:NASD) and Fannie (FNM:NYSE), spread to the semis and Boo is now kicking the tires in the software and internet space. The prevalent theme is still glistening green--breadth is snazzy while most sectors are still enjoying a fine day--but the flag is far from captured.

There are a few competing themes and it's important to swallow them one at a time. In the nearest-term, the question is one of clarity vs. catalyst. The bulls are hoping that the "big ugly unknown" is out of the way while the bears are ready to sell the news & spooz. The winning side will likely be a function of levels with S&P 1140-1150 and NDX 1500-1525 providing relatively defined zones of action. It's certainly not an absolute proxy, mind you, but it does offer a framework with which to trade.

The next discussion is how the tape will trade beyond this near-term noise. My sense is that psychology will be the defining metric as we weigh the potential for a "long squeeze" (performance anxiety) against the path of maximum frustration. That script is still in development and will edit as economic and fundamental data points procure. Brian has mapped out the strongest bull case I've seen while crude realities and dollar squalor remain problematic.

The longer-term muck remains the same and would have regardless of who took the Oval Office. We've got a tough road ahead of us and while there will surely be opportunities for those who are patient and disciplined, I remain of the opinion that the financial landscape will become increasingly difficult to navigate. That's not news to long-term Minyans but it bears repeating for the newbies in our midst. Minyanville will always lend our eyes and ears but the onus is on you to make the right decisions.

As for the rest of the session, I'm not entirely sure if this "press" is a head-fake lower (contra-hour) or the beginning of the roll-over. The action in the semis and nets isn't bovine friendly (S's over N's) but the broader tape hangs tough (breadth and price action). I'm not making any huge directional bets but, as a function of my posture, will make more money in Red Dye than I will with the Matador Crowd. Truth be told, I'm fried and tired and under the "know thyself" rule, I'm doing a bit less.

I'm gonna jump and juggle as I've got meetings on the bell and a much anticipated Succofest tonight. On a closing note, let me say that a new era began today and--for better or for worse--we're all in this together. A little altruism goes a long way when multiplied by millions and it will make a difference if we all do our part. Be good to others, better to yourself and, if at all possible, do something Joel. It's the little things that make a difference and it's never to late to start.

Have a peaceful night.

R.P.

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