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The Dance Trance

By

Hey Toddo--that was some premature evacuation!

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Oh when you were young
Did you question all the answers
Did you envy all the dancers
Who had all the nerve


(Crosby Stills Nash & Young)



Good morning and welcome back to the quivering quack. The world has on her dancin' shoes as critters wonder what to choose. The cards were tossed a bit of late but bulls press on and bears tempt fate. "With crude and metals turned around," asked Boo the hairless trading clown, "you'd think that stocks would be unwound and stumble down to Red Dye town!" Shall they slip now and disavow or will Hoofy soon take a bow? It's time to rise--you know the drill--so settle into Minyanville!

There's been a ton of chatter regarding the delicate balance of the asset class dance. With the metals smelting and fixed income greener than a pine, traders have one eye on currencies as the other twitches towards stocks. I opined recently that volatility tends to migrate and, as such, may ultimately lead to a stocking suffer. The conditional elements are in place (complacent sentiment) but just because Hoofy is skating on thin ice doesn't mean he'll find his way to Lake Flaccid.

Along those lines, reality dictates that the dollar should go lower--we're up to our eyeballs in debt on every level (consumer, corporate, government) and we're spending addicts one and all. And while the consumer will invariably pull back the reins (which will trickle up to big business), the beltway has a bigger problem on their hands. We're in an expensive war that needs to be fed and our ability to borrow is a function of overseas demand. If ever the twain shall meet, the schvitz that hits the fan will usher in a rush of green confetti.

This realization is, of course, nothing new. In fact, after puking up a third of its value in three years, the financial press has awoken while mainstream America sleeps. Therein lies the dilemma for those trading the grubby greenback--the dollar bears don't enjoy the stealth status they once did, but middle America could care less about those Yen things. All they know is that the services they need seem to cost more while the things they have enough of are cheap as dirt.

I've long viewed the dollar as a troubled soul but sensed a potential counter-trend rally this past Autumn. That vibe may prove early--or dead wrong--but 2003 taught me a thing or two about the dichotomy between perception and reality. The markets are a combination of human emotion and structural mechanism and that can manifest in wily ways. So for those of you who are set in your ways--be it gold, stocks or sports teams--I will remind you that discipline, humility and patience are the greatest allies a trader can have.

Finally--and this time I really mean it!--I am proud to announce the 2nd Annual Minyanville Festivus auction! We will humbly offer two seats to the Minyanville holiday dinner to the fine fella (or fellette) who deems it most worthy and proceeds will benefit The Ruby Peck Foundation for Children's Education. The fete will take place in New York City on December 22nd and space is limited to 35 of the finest folks I know!

The guest list is still evolving but Scott Reamer, John Succo, Greg Collins, Jeff Macke, Rich Gula, Snoop Tone, Phil Erlanger, Michael Santoli, Greg Weldon, Bernie Schaeffer, Fokker Kahn and the "spankin' brand new Minyanville brass" have already given the wink. Plus, and you'll have to trust me on this, I've booked some "insane" entertainment and will make certain the winner is circled on a "special gift."

I'm not sure what type of tag this will fetch but we would be remiss if we didn't do our part to help the kids!

Good luck today.

R.P.

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