There is $100 million to sell market on close.

I am going into the Tesla (TSLA) earnings report with a tag end short position and a small position in out-of-the-money puts.

I would say, (almost) unequivocally, that Ford (F) and General Motors' (GM) shares are clearly expressing the notion of "Peak Autos" and "Peak Auto Industry Margins."

If matters couldn't be worse -- they are. I now prep for a colonoscopy and upper endoscopy for tomorrow morning. You will be in the capable hands of Bret Jensen.

• Another bullish day is at the highs now.
• We are 240 S&P handles from the late September low and from Carl Icahn's market warnings. Mind-blowing.
• Higher crude oil prices fueled the energy sector again today and aided the broader market.
• Interest rates are backing up; municipals were lower in price.
• One would think that closed-end municipal bond funds would sell off. They are not selling off.
• The high-yield market had a modest bid to it.
• The U.S. dollar was slightly stronger -- that's no longer a negative (though the consumer nondurables continue to lag for two straight days).
• Financials moved steadily forward led by the Big Three money center banks Citigroup (C), Bank of America (BAC) and JPMorgan Chase (JPM).
• I did very little as my confidence level is low to nonexistent.

The 30-year U.S. Treasury bond's yield has regained the 3% level.

With the markets at the day's highs, players are once again rejoicing about European Central Bank chief Mario Draghi's promises.

From Dan Loeb's Third Point hedge fund's third-quarter letter:

"We do not see indicators of a looming U.S. recession and so, while volatility is likely here to stay and multiples may be capped, we are seeing some compelling value opportunities in stocks. The environment for short selling is also attractive and we have more single short names than long positions in our book today. We have reduced our net exposure by nearly a third through sales and new shorts over the past few months while maintaining significant positions in our highest-conviction event-rich names. The conviction to keep and add to our core health-care names during the sell-off enabled us to re-establish ourselves on positive footing this month."

The latest from Sir Arthur Cashin:

"Crude gets second leg up with bullish comments on electronic media. That help lifts Dow back to day's highs. Dow needs to punch above 17,930 or risk creating the illusion of a mild double top.

(European Central Bank chief Mario) Draghi speaks at 1:30 p.m., not 12:30 p.m. as originally guessed."

Fertilizer maker Mosaic Co. (MOS) reported a top-line miss but a bottom-line beat this morning, and the shares are trading up nicely as a result.

The good news is likely pulling up shares of Potash Corp. (POT) as well.

Here's a summary of Mosaic's earnings call:

• World demand for MOS products are strong in most locales.

• The company is well-positioned for improving industry conditions.

• The one constant around the world is that demand for both potash and phosphate remains strong.

• Global phosphate shipments should hit a record this year, although potash output will probably drop slightly from 2014's record level.

Midday musings from Sir Arthur Cashin:

"Rally widens a very little bit as Dow drags the others somewhat reluctantly behind.

(Daniel) Yergin and others' talk of crude turnaround causes some short-covering in oil.

Run rate at 12:15 projects to an NYSE final volume of 900/960 million shares, a bit ahead of Monday."

"Driving that train, high on cocaine,

Casey Jones you better watch your speed

Trouble ahead, trouble behind

And you know that notion just crossed my mind."

-- The Grateful Dead, Casey Jones

To put last month's rally into perspective, the S&P 500 has risen by nearly 200 points (or 12%) since Carl Icahn issued his warning of a looming economic and market catastrophe.

That's 200 points, folks.

My "Long Trade of the Week is once again the Blackstone/GSO Strategic Credit closed-end fund(BGB).

Why?

Well, the differential between the junk-bond market as measured by the SPDR Barclays High Yield Bond ETF (JNK) and the U.S. stock market as gauged by the SPDR S&P 500 ETF (SPY) is seriously stretched right now.

If the equity market continues to rise, I can't see the high-yield market failing to improve in price. But given the existing chasm between JNK and SPY, I can't see much vulnerability if the equity market falters, either.

So, I'm going long on BGB at $14.49.

I'm making the iShares Russell 2000 ETF (IWM) my "Short Trade of the Week" at $117.94.

This is almost a purely technical decision, based on:

• The market's general overbought condition, which is beginning to look like a mirror image of the oversold conditions we had in late August when the S&P 500 was four standard deviations from its 50-day moving average.

• The fact that the Russell 2000 is approaching massive resistance.

• The point that while the Russell 2000 is quite diversified, it does have important technology and pharmaceutical/biotech components. From my perch, those sectors are vulnerable to profit-taking.

Midmorning musings from Sir Arthur Cashin:

"Dow benefitting from lift in crude, with Chevron (CHV) and ExxonMobil (XOM) joining Visa (V) and Goldman Sachs (GS) to provide the bulk of the gains. Gold continues under pressure and is beginning to suffer some technical damage."

The two-year U.S. Treasury note's yield is rising to 0.77% ahead of tomorrow's auction, while the when-issued yield is touching  0.79%.

The rising yields come one day after the Atlanta Federal Reserve cut its GDPNow estimate of U.S. gross domestic product to a 1.9% fourth-quarter gain, down from a previously projected 2.5%.

Since April 2011, the only two days where we had higher two-year yields than today came on Sept. 15 and 16. Those came right before the Sept. 17 Federal Open Market Committee meeting, where the Fed decided to leave interest rates unchanged.

On those two days, the two-year Treasury yield closed at 0.80% and 0.81%, respectively. And on Sept. 17 itself, the yield dropped to a 0.68% close after the Fed decided to stand pat.

Potash Corp. (POT) is beginning to participate in the industrial/commodities rally now.

I'm mostly doing research today and only plan to do limited trading.

As for how the markets are faring, energy is the "World's Fair" once again today in the face of a 2% rise in oil prices.

China, Spain and the S&P 500 are subjects that Peter Boockvar explores this morning:

"Chinese President Xi Jinping is calling for economic growth of no less than 6.5% a year over the next five years. With central planning being what it is in China, they may achieve that number 'officially' -- but the reality, of course, will be highly questioned and very likely different (i.e. lower).

With respect to the important reform that's needed, China wants to speed up the opening of state-owned sectors such as energy, electricity and telecom. The other key goal is, of course, getting the yuan included in the International Monetary Fund's Special Drawing Rights basket. And the country has set a five-year goal of making the yuan 'freely convertible and usable.'

They also plan on delivering reforms to their financial system. But they walk a fine line in doing so, because the People's Bank of China keeps cutting rates and RRR -- which of course encourages more borrowing.

The Shanghai index closed down by 0.25% and is below its close of Oct. 23 (the session just before the PBOC announced plans to ease interest rates further). Elsewhere in the region, the H share index broke its five-day losing streak with a 0.4% rally and most other markets bounced after what had been a big yawn over the past week in response to China's rate cuts.

The Reserve Bank of Australia left interest rates unchanged at 2% as expected. The RBA said in a statement: 'The board judged that the prospects for an improvement in economic conditions had firmed a little over recent months and that leaving the cash rate unchanged was appropriate at this meeting.'

The Aussie dollar rallied on the commentary, but RBA members left themselves some rope to ease if they believe necessary. They said the outlook for inflation 'may afford scope for further easing of policy, should that be appropriate to lend support to demand.'

I've said this, before but I'll say it again -- I believe the RBA is one of the most responsible, humble and prudent central banks on the planet. They never drank the Kool-Aid of persistent negative real interest rates. They never believed that everything should rest on their shoulders, and now they don't have to deal with the problem of getting out of a Zero Interest Rate Policy because they never got themselves close to it. They also haven't had a recession in 25 years. I'll give them China, but we all benefited from China over the past 25 years. The ASX rebounded by 1.4% overnight after six straight days of declines.

In Europe, the number of Spanish unemployed people rose by 82,3000 vs. a 71,000 estimate. But the report isn't seasonally adjusted, and numbers therefore tend to rise in August, September and October as the summer tourist season winds down. On a seasonally adjusted basis, claims fell.

Spaniards go to the polls on Dec. 20, and third-quarter GDP growth there was 0.8% q/o/q or about 3.2% annualized -- one of the best rates in the world right now. Labor-market liberalization, lower oil prices and a weaker euro certainly helped. The IBEX is up 0.2% for the day but is basically flat this year in euro terms. It's down almost 8% in the year to date in dollar terms.

The standout European market this year is Italy, with an 18.8% year-to-date euro rally and an almost-8% gain in dollar terms. European Central Bank chief Mario Draghi speaks today, and the euro is lower ahead of that.

Here at home, the S&P 500 yesterday basically closed at the scene of the crime on Aug. 17th, just a few days before things unraveled. Today, we have a quiet news day outside of more earnings. Auto sales will be the main focus, while a flood of 'Fedspeak' begins tomorrow with a multitude of speakers -- including Federal Reserve chair Janet Yellen and New York Fed President William Dudley.

We'll also see the U.S. Treasury auction off two-year notes tomorrow, with the when-issued note trading with a 0.78% yield. If you recall, the last time we were at these yield levels was the day before the Federal Open Market Committee decided to punt on raising rates in September."

I gave a keynote speech to a nice crowd Saturday at the New Orleans Investment Conference. There were some terrific speakers there -- Marc Faber, Dennis Gartman and Doug Casey, as well as many others.

Apropos to the fact that it was Halloween, my talk took some strange and unexpected turns as I split my discussion into a variety of topics:

1) I started with my rendition of Take Me Out to the Ball Game, where I talked baseball and how it relates to the gold markets. 

2) I turned to the conference's "Three Horsemen of the Market's Apocalypse" (Doug Casey, Marc Faber and Peter Schiff).

3) I moved back to baseball -- after all, the World Series was on -- and some lessons from my cousin Sandy Koufax as it relates to investing in precious metals.

4) I asked what I see as the four most important questions facing investors.

5) I discussed the market's "Orwellian" backdrop,  specifically "Big Brother" (the quants) and "Big Father" (the business media)

6) Next, I outlined the growing chasm between rising financial-asset prices and the stagnating real economy.

7) Then I discussed why domestic growth will in all likelihood remain subpar (in marked contrast to Dennis Gartman's upbeat stock-market discussion in a previous conference session).

8) I ended with the top 10 reasons I think the market is overpriced.

9) I concluded with a summary of my thoughts.

I want to give you a flavor of my speech, which started something like this (if there's an interest, I'll publish some more later in the week) :

"Those who know my views know that it's a rare morning indeed that I give a speech at a conference like this where I'm not the most skeptical and bearish commentator in the room.

But today and over the last two or three days, I'm surrounded by gold bugs, libertarians and hard-dollar investors who find comfort not in finding the next big stock short (as I do), but in finding the most obscure and leveraged Canadian junior gold-mining company that has the potential to rise by 10-fold in price!

I know it's Halloween today, and I guess that makes sense because I can see all of the monsters and golden goblins in the audience that have assembled today. I for one plan to trick or treat tonight as a 'roll-up,' or perhaps as 'Prince Valeant' -- as in Valeant Pharmaceuticals (VRX)!

But I'll have more on roll-ups in a few minutes.

This is World Series time and I'm a baseball aficionado -- maybe having a cousin named Sandy Koufax does it to one!

So when I think about some of the conference's participants -- such as Doug Casey, Marc Faber and Peter Schiff -- to me they resemble 'Tinkers to Evers to Chance,' the famous Chicago Cubs double-play combination at the turn of the last century. But Casey, Faber and Schiff's uniforms are gold on gold, not the Chicago Cubs' uniform of blue on white.

Back in the early 1900s when this double-play duo was all the rage in baseball, New York reporter Franklin Pierce Adams wrote a poem on the way to a game at the Polo Grounds, entitled Baseball's Sad Lexicon. It was published in his Always in Good Humor column in the New York Evening Mail.

The power of the poem and Adams' immortalizing words turned a trio of relatively modest ballplayers into Hall of Famers and the enduring icons of the Cubs' last World Series championship.

The double-play team -- known as 'The Three Horsemen of this Apocalypse' of the 1906-10 National League -- led the Cubs during those five seasons to 530 winning games, four pennants and two consecutive World Series (1907 and 1908).

While the three Cub infielders were good hitters -- especially in the Dead Ball Era --  it was in the field (as a thieving accessory to those meal-ticket pitchers) where they earned their legend.

In his poem, Adams immortalized these three muses of the Chicago Cubs infield, three thorns who eternally vexed his beloved New York Giants. It seems appropriate to immortalize three others who have already spoken at the conference, Casey, Schiff and Faber -- this conference's Three Horsemen of the Economic and Market Apocalypses! -- by using Adam's 50-word poem as a template.

This is especially appropriate since we're in the middle of this year's World Series. With the Cubs once again suffering a terrible defeat this season, I'll modify Adams' poem to bring it up to date and make it relevant to the theme of the talks I've heard at this conference:

Let's call it The Market's Sad Lexicon:

These are the saddest of possible words:

'Tinker to Evers to Chance.'

Trio of bear cubs, and fleeter than birds,

Casey and Faber and Schiff.

Ruthlessly pricking our gonfalon bubble,

Making a Giant hit into a double.

Words that are heavy with nothing but trouble:

'Casey to Faber to Schiff.'

Let me start by observing that this conference reminds me of the great country & western song: She Got the Gold Mine and I Got the Shaft.

While I always made my bones finding the next equity bubble, many of you have made a career in finding the 'next big thing' in Canadian gold mining -- although the term 'Canadian finance' is something of an oxymoron to me!

I try to fire fastballs at stocks like Tesla (TSLA), Berkshire Hathaway (BRK.A, BRK.B) and Netflix (NFLX) while many at this conference fire fastballs at the U.S. Dollar and emerging-market debt.

I've been a gold bear since 2011, and have debated my cautious view of the metal on several occasions with my pal Peter Schiff -- most notably in our 'bullion brawl' on CNBC. But I made an about-face on gold in the last few weeks in response to today's central-bank lunacy. I suppose you can say regarding gold that, to paraphrase Mae West, 'I used to be Snow White, but I have recently drifted.'

Regardless, my cousin Sandy Koufax would be proud of Peter Schiff, Mark Faber and Doug Casey because they've  stuck it out. Yes, the last four years have been rough on precious metals -- as I mentioned, you have taken the shaft!

But let's recall that Sandy Koufax, too, started out as a very wild pitcher with little control at the start of his pro career in the mid 1950s. But by 1961, that all changed. It was his final four seasons (1963-66) not the first four seasons that earned Sandy his reputation as the modern era's greatest left-handed pitcher.

He pitched no hitters in each of those four years, and his average seasonal record was 24-7 with a 1.86 ERA. He also averaged 298 innings pitched and 307 strikeouts per season -- striking out an amazing 382 batters in 1965 alone.

But Sandy's most remarkable stat of that period was that he averaged 22 complete games per season. And in his last season (1966), his record was 27-9 -- with a 1.73 ERA, five shutouts, 27 complete games, 323 innings pitched and 317 strikeouts. These statistics are even more amazing when you consider that every pitch Sandy threw that year was made while in terrible pain from a seriously arthritic arm and shoulder.

So there's hope yet for gold investors who've had rough sledding over the last four years. And I suspect with all this central-bank tomfoolery that the price of precious metals could be on a better trajectory in times ahead -- just like the last few years of Sandy's career!

But I'm not here to discuss gold or baseball -- most of you have more knowledge of gold than I do.

Instead, let me note that as an equity investor, I begin every day by asking these three important questions:

1. In a paperless and cloudy world, are investors and citizens alike as safe as the markets assume we are?

2. In a flat, networked and interconnected world, is it even possible for America to be an 'oasis of prosperity' and a driver of global economic growth?

3. With geopolitical coordination of the G-8 at an all-time low, if the wheels do come off, how slow and inept will the reaction be?

I also end every day by asking the following question:

4. After six years of the Federal Reserve's Zero Interest Rate Policy and Quantitative Easing, the global economy is still in a condition that precludes a meager 25-basis-point Fed rate hike rise. What does that say about the future when a zero-bound rate setting is failing to generate self-sustaining growth and escape velocity in the U.S. economy?

Answer these questions honestly and you'll almost certainly conclude that the outlook for global equity markets is 'FUBAR,' that prospects for worldwide economic growth and profits are inflated and that valuations and market levels are overpriced (possibly meaningfully so).

Market participants, to quote my Grandma Koufax, are 'in a pickle from Katz's Delicatessen on Houston Street.'

The markets and global economy has never faced such a wide array of possible outcomes (many of them adverse). Yet market participants seem afflicted with a loss of memory and the belief that only positive outcomes stand to survive.

My Malthusian view seems justified based on the ever-weakening and wobbly global economic outlook, and by still-elevated valuations.

Despite the ongoing propaganda reinforcing America's 'cleanest sheets in a brothel' economic growth, the fact is there's a reason why the Fed folded, why Draghi doubled-down, why China cut and why Kuroda will likely unleash ever more QE.

Central bankers have set a trap for themselves by enabling massive financial-asset inflation in the face of what's now the longest streak of economic weakness and data disappointment on record. And now it appears that this trap will prove their impotence and/or insanity.

A year ago, five-year inflation breakevens were around 1.5%, but they're now 1.15%.

A year ago, S&P 500 profits were running at a $114-a-share annualized rate and estimates for this year's EPS were up to $135 a share. But today, profits are only running a $107-a-share annual rate and the U.S. stock market is near an all-time high.

Corporate profit margins have taken a sharp hit and corporate profits are now down by over 5% despite the financial engineering of share buybacks.

For the markets to rise from here, either earnings will have to broaden out or price-to-earnings multiples have to expand. The latter seems unlikely."

While I might be wrong, I have a view of two important and overriding reasons why the U.S. stock market has bolted higher over the last month:

An Epic Performance Chase

There has rarely been such divergent group performance as there has been this year. This has led to a vast difference in hedge-fund performance. As a result, a lot of players are chasing the "winners" right now.

Quants Rule the Day (and Also Chase Performance)

Quants base their risk-parity portfolios and price-trend and volatility-managed strategies solely on stocks' past price performance and volatility. As I mentioned in yesterday's opening missive, they're agnostic about balance sheets and income statements, while fundamental investors like Warren Buffett are an anathema to them and the term "intrinsic value" isn't even in their vocabulary.

They influence prices to the downside and upside, as there's a positive-feedback loop between all of these strategies.

Gamma hedging of derivatives caused higher market volatility in late September, which in turn led to selling in risk-parity portfolios. The resulting downward price action invited further CTA or price-trend strategies' shorting. Then we experienced the feedback loop to the upside during the last four weeks -- and Wall Street's investment "movie" went into reverse.