• I am outta here early.

I am exhausted -- like I am sure many of you are.

I am out of here early as I have to prepare to leave to southern Florida tomorrow.

Thanks so much for reading my Diary.

I try to create a value-added and transparent feed that fully explains my methodology and action.

And I try to be flexible in my approach and in light of the fact that subscribers have different objectives and time frames (trading, investing, hedging etc.).

Get a lot of rest and enjoy the weekend as next week promises to be just as hectic.

And please say a special prayer for Uncle Vinnie.

• We have two more winners.

Congratulations to Thomas Swede who won Friday's trivia contest. Thomas will receive an autographed copy of my new book (to be published by John Wiley & Sons on Nov. 17, 2014) Doug Kass On The Market: A Life on TheStreet.

In addition, 1BigP1 will be invited to attend my book launch party in New York City on Nov.18!

Here are the answers:

David Kansas was TheStreet's editor-in-chief back in 1997.

David is currently chief operating officer of The American Public Media Group, the largest non-profit in Minnesota's arts and culture sector.

http://en.wikipedia.org/wiki/Dave_Kansas

• Please respond in the comments section.

Nearly three months ago, I instituted a trivia contest -- the contests so far have been won by subscribers Big Nate, Terry, Judge Smails (Chuck), Baron Von H, Rholeman, Chris Carlucci, Ishuuu, Putty, Bozzob, CG, FreakyGuy666, Diana and Techbanker -- with the first prize being an autographed copy of my book (out in mid-November 2014), Doug Kass on the Market: A Life on TheStreet¿.

Today I am again offering a second prize to the winner of (the Bonus Question) in our Trivia Contest, a special guest pass to my Nov. 18 book launch party in New York City. This event should be an amazing time, with many of the Wall Street legends that I write about in my book in attendance. I am certainly excited about it! 

Here is the first question:

In 1997 the editor-in-chief of TheStreet called me to ask if I would write a new column for the site. 

What was the editor's name? 

Here is the bonus question:

What is the individual's current affiliation and position?

Good luck!

• Closed out at $23.68.

I haven't discussed Cisco (CSCO) much since I shorted the stock in mid-August.

I have been trading actively in this name, as you can see from the archives during the summer.

I just closed out my last short ($23.68) in the name for a small gain.

• Expanding my short bond position.

Investors worldwide poured in nearly $16 billion into bond funds during the week period ending October 8, 2014. That's the largest absolute inflow in dollar terms on record (since records were kept in 2001) for any seven day interval. (Source: Boston-based tracker EPER).

I have expanded my short bond position again today.

• My Bloomberg Radio appearance

Here is the podcast of my Bloomberg Radio appearance today with Kathleen and Vonnie on "The Bloomberg Advantage."

http://www.bloomberg.com/podcasts/hays-advantage/

• Lifting the balance of my index shorts

I am lifting the balance of my index shorts and moving back into market neutral mode as I believe I will have opportunities to short higher in the next few weeks. 

I covered SPDR S&P 500 ETF (SPY) at $192.05, PowerShares QQQ (QQQ) at $95.74 and iShares Russell 2000 (IWM) at $105.80.

I remain Bearish over the intermediate term but it is important to emphasize that markets don't typically move in a straight line.

As always I plan to be opportunistic.

Hertz (HTZ) is down one-third in a month -- an Icahn favorite and no one is discussing. No wonder he is bearish.

http://finance.yahoo.com/q/bc?s=HTZ&t=1m&l=on&z=l&q=l&c=

• No one is talking about Hertz

• Still short, but less

As we near some potential short-term capitulation, I have covered some more SPDR S&P 500 ETF (SPY) at $191.88, iShares Russell 2000 (IWM) at $105.20 and PowerShares QQQ (QQQ) at $95.60.

Still short but less so.

• Mid-morning musings from Sir Arthur Cashin

The Nasdaq Composite was getting crushed, which weighed on the other indices. The S&P took out the important 1925 level (morning low 1981). That suggests the next logical target would be at, or near, the 200 DMA (circa 1900/1905).

Run rate later.

• Still slightly net short

While still short SPDR S&P 500 ETF (SPY), iShares Russell 2000 (IWM) and PowerShares QQQ (QQQ), I have reduced my short exposure in the woosh lower (S&Ps were down as much as 15 handles after being 7 handles higher an hour earlier).

The semiconductor selloff looks like the potential for a capitulation and, with overall sentiment deteriorating so quickly, a tradable bounce might be near.

I am also adding to individual longs.

That said I am still slightly net short.

• I am getting aggressive

I would highlight Citigroup (C) this morning -- I like the entry point and I am getting aggressive.

Might be good for a trade and an investment.

Picking at Yahoo! (YHOO) now.

• Semis getting beaten badly

Late yesterday, I mentioned the possible consequences and meaning of the rare Microchip Technology (MCHP) miss (after the close).

I can't recall semis ever getting beaten this badly in unison on one day, even in 2008-2009. (The Market Vectors Semiconductor ETF (SMH) is down by nearly 7%.)

The semi action is a constant reminder of the lack of liquidity and "Hotel California" -- you can get in but you can't get out (at a reasonable price).

I see 10 visible and mid- to- large-cap names down 10-15% today. This could speak more to the froth in the names than the growth markdown.

This ain't March 2009 when the world was imploding.

Not yet anyway!

• Thus far I have added small to my OAK, C and NWBI longs today.

• I remain net short. 

At current prices I am an add-on buyer of Northwest Bancshares (NWBI), Yahoo! (YHOO) and Oaktree (OAK).

Also, Citi (C) at $50.50 and Bon-Ton (BONT) at $8.50.

I remain net short and plan on adding to my short bond position today.

• I'll be on Bloomberg Radio.

I will be discussing the markets on Bloomberg Radio with Kathleen and Vonnie on "The Bloomberg Advantage" at 10:05 a.m. ET today.

• Futures rallying sharply on this news.

Kiev agrees to withdraw troops from several Eastern Ukraine cities -- DPR leader Zakharchenko. (via Russian news agency)

• From Sir Dennis Gartman's "The Gartman Letter" this morning.

Finally, from our old friend, and fellow Woodstock attendee, Doug Kass, the following wisdom:

"Share prices have obviously benefited from massive liquidity and a zero interest-rate policy. The recent high-beta earthquake in which stocks sold off was probably the first shot across the bow. Increasingly, the market seems to be realizing that each progressive quantitative easing is having a more restrained impact on growth. With rates at zero, QE [quantitative easing] has become a blunt tool. The Federal Reserve has built a bridge to growth, but it can't deliver the destination on its own. And the flattening of the yield curve tells a story of slowing growth. There is about a 230 basis point [2.3 percentage points] spread between two- and 10-year Treasuries, compared with almost 270 bps at the end of last year. That's signaling muted economic growth. If growth fails to emerge in the months ahead, we'll see an "ahha" moment in which investors, to quote the singer Peggy Lee, say, 'Is that all there is?' " ¿  Doug Kass, "Preparing for the Bear's Return," Barron's (April, 2014)

We have arrived at that "ah-ha" moment apparently.Important trend lines have definitively and definitely been broken. 

- Dennis Gartman, "The Gartman Letter"

• The Gospel According to Peter Boockvar.

European growth concerns are again being cited for the equity market weakness this morning but I think it's more the loss of confidence in the ability of Draghi and the ECB to offset the economic slowdown. European growth concerns have been an issue for years but what has not been an issue until now is a lack of faith in Draghi to offset it. 'Out of bullets' is a well used cliché but it is gaining traction with respect to all central banks. Combine this with the end of Federal Reserve QE and market turbulence is what you get after a massive run over the past few years. Draghi himself understands his own limitations and why he keeps hammering European governments "to do the right thing." The right thing being liberalizing labor markets, cutting taxes, wasteful spending and regulatory red tape. After all, monetary policy can only buy time. It creates nothing new as it just pulls things forward both for economic activity and asset prices.

French industrial production in August was flat m/o/m vs the estimate of down .3% but manufacturing production unexpectedly fell for a 2nd month. Italian IP was higher in August but less than forecasted.

Unfortunately in Hong Kong, the Chinese government decided to end discussions to end the protests. This will now lead to more protests and it helped to drive the Hang Seng index down another 1.9%.

September consumer confidence in Japan fell to 39.9 from 41.2, a 4 month low and below the estimate of 41.8. The important Income Growth component fell for a 2nd month. The employment index fell to a 4 month low and Willingness to Buy Durable Goods dropped to a 5 month low. Abenomics, so reliant on Kuroda and the BoJ, needs to aggressively work on his 3rd arrow because the time the first two arrows bought needs to be better used by the Abe government.

• Worth another look.

Late yesterday afternoon I published "10 Lessons I Have Learned from the Last Two Weeks ... and Some Wise Words from Vizzini."

I think it "bears" repeating.

1. Never be self-confident in view, as the only certainty is the lack of certainty. 
2. Avoid (and never pay attention to) those commentators, money managers and analysts who display an over confident market and view. (For that matter, never ever trust Federal Reserve economic forecasts).
3. At times, Mr. Market exists to screw the most people.
4. The crowd typically outsmarts the remnants -- except at inflection points.
5. Always pay attention to technical divergences during market rallies, particularly during the later stages of an advance. Narrowing leadership and a contraction of breadth are usually tell-tale signs of a maturing bull market.
6. The relative performance of small-cap stocks (e.g., the Russell 2000 index) should never be ignored. 
7. TINA (there is no alternative) is a silly reason to be long stocks, as cash is a defensible asset class during almost all periods.
8. Volatility is not the friend or companion of a bull market.
9. Sometimes it is more appropriate to be concerned with the return of capital than the return oncapital. Risk-aversion and preservation of capital should always be on your mind, as we never know (as Grandma Koufax used to say) when "the Cossacks are coming."
10. And, of course, "Never get involved in a land war in Asia and never ever go in against a Sicilian when death is on the line!" 

• I received this note from my friends at BTIG late yesterday afternoon.

If we close down 1.5% today (we did!) we will have completed a rare 3 day action pattern in the market in which day 1 the market closes down at least 1.5%, day 2 closes up at least 1.5% and then day 3 closes down at least 1.5%.  Since 1980 this has only happened 11x.  here are the immediate results after the prior 11 occurrences