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Blazing Paddles

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That's a cheap shot!

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"Then one day I hear "Reach for it, mister." I spun around, and there I was standing face to face with a six year old kid. Well, I just laid down my guns and walked away. Little bastard shot me in the ass. So I limped to the nearest saloon, crawled inside a whiskey bottle, and I've been there ever since."

--Jim (The Waco Kid), Blazing Saddles




It's just another day in paradise as Mongo the mortgage giant (FNM:NYSE) whispers quietly by. While one would expect the tape to get Von Shtupped, the ripples from Rock Ridge haven't altered Hedley's medley. In fact, and despite additional fright from the Goldman (GS:NYSE), there doesn't appear to be any robbers around. If the financial complex can isolate these two events, as it seems to be doing, it's no shocker that the broader market is emboldened.

I opined on the Buzz that a frisky Fannie encapsulates the equity experience. Folks have been conditioned to believe the Matador roar (and discount the ursine count) as a function of the lifting levels. There is a fine line between respecting the action and using price to your advantage and it's subjective to each Minyan. Suffice to say that the "eyes" have it (for now) but the risk of being blindsided increases when everyone is staring in the same direction.

While equities wade, the macro dance continues to shift supply and demand. The yo-yo that is our currency has grabbed some greenback as the dollar index tacks on a percent. Not surprisingly, the metals have taken the other side of that trade as gold slips $3.5 and silver (-2.5%) drips through the 200-day. Perhaps the most curious action of the day is in fixed income land as the yearn of yonder turns to the spurn and squander. Finally, eyeing the oil patch, crude has hiccupped back a percent as it toe picks the 200-day.

The witches will arrive tomorrow for the final expiration of '04 and there is still a "pull" towards S&P 1215. There is also outsized open interest in the 1200 line so both sides of the fray may come into play. Two caveats--one, that mechanism evaporates tomorrow morning and two, market internals are stanky. That may not matter but I would rather share my eyes and let your fingers do the walking.

Only three sessions left to bid on the Minyanville holiday auction as Festivus draws near! The critters have been hard at work and we've got folks heading in from California, Ohio, Florida, Wyoming, Virginia, Boston, Colorado and Jersey! Everyone will leave with a sparkle in their eye, some magic in their mind and a "special" gift under their arm. It promises to be special and, with the proceeds to benefit The Ruby Peck Foundation for Children's Education, we'll wrap this year up by givin' a little something back!

As always, I hope this finds you well.

R.P.
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