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Chains of Heart


What goes around, comes around!


Someday love will find you
Break those chains that bind you
One night will remind you
How we touched and went our separate ways.


The afternoon's sway is finding its way as the traders trade and the critters play. The equity backdrop should be a tad firmer on the heels of softer crude (-2.2%), renewed merger mania and continued traction in the trannies. But the grinding is painful--and thus far fruitless--as players position themselves for the looming catalyst tri-fecta (earnings, Elmer and Iraq).

There isn't much to add that hasn't already been covered in our recent missives. Hoofy is hangin' his hat on the tight credit spreads, unmotivated selling pressure and the ubiquitous wall of worry. Boo, for his part, is encouraged that so many folks are "certain" of the next leg higher. "If everyone is positioned for the upside and nobody is left to fight the furry fight," he muses, "there will be little in the way of demand after folks buy the first, second or third dip."

The bad news bear makes a point and, for the record, I agree with him. Still, momentum buying (as we saw last year) can create continually overbought conditions and squeeze the fleas who are playing the fade trade. I will again circle back to a point I made Friday when I offered that the fate of the tape will ultimately be determined by the structural metric. In other words, will Elmer be able to quench the thirst of the muddled masses by flushing the market with fresh liquidity?

It seems a bit 'pat' that the chainsaws can juggle through November but nothing would shock me anymore. I'm not betting that way, however, as I would rather make (and take) trades (both ways) while keeping my right hand up. The onus is on us to adapt to the environment and find our way through the tough tapes. It'll eventually get easier, my friends, but there's a good chance that it'll get harder first.

In Minyanville news, I would like to keep the Crested Butte retreat in front of everyone as it's a scant two months away. Please join Scott Reamer, Greg Weldon, Neal Dingmann, Tony Dwyer, Kevin Depew, Jason Roney, John Succo, Kevin Tuttle, the critters and myself for wicked fun mountainfest. We have a Minyan travel representative ready, willing and able to help! Thanks kindly and I hope to see you--and your family--for some rocky mountain highs!

Good luck into the bell.

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