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Elmer's Boo


I've seen about 5 million QQQ for sale from the macros and thus far I'm chewing through it.


Well there's a light in your eye that keeps shining
Like a star that can't wait for the night
I hate to think I've been blinded baby
Why can't I see you tonight?

(Led Zeppelin)

Uncle Elmer, chillin' at the Del Boca Vista, hits the tape with his observations on the current environment. "The odds 'increasingly favor' job creation," he opined, but "the 7.2% third quarter GDP growth pace is unsustainable." Before he left for the early bird dinner special (dude, it's 10:40!), he offered that "recent budget talks are not encouraging" and there's "scant evidence of pricing power" Thanks tee it up!

The minx is moody today on the heels of Cisco's disco. Techs are outperforming, to be sure, but the action is very sector specific. Retail hangs tough (in the face of blah retail sales), the banks are softer (watch this group for rate hike reaction), the semis remain the battleground de jour (resilient suckers) and the drugs act like they're on drugs.

Meanwhile, the F-troop remains quite the fight and Fannie is ticklin' a six-handle for the first time since late September (2003). The dialogue is getting thicker in Washington as Congress is scheduled to go on recess later this month. There are two camps vigorously fighting the reform norm. On the one side, some high ranking government officials are looking to stem a potential "meltdown." On the other, 40 lobbying firms (count 'em) have spent almost $10 million trying to sway the fray. As Comicus would say, "politics, politics, politics!"

It's very whippy out there as the bulls and bears duke it out. I wondered before if too many bears are waiting for the Scotto scenario of if we should follow the script for as long as it works. I'm not sure of the answer, but a few things are readily apparent. N's over S's, the financials will reflect rate hike jitters and Fokker is eyeballing a new job.

As always, I hope this finds you well.
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