Speaking of exhausted (which I am), here is the second Tweet of the Day:

Though soybeans are +$10 (+1.1%) most of the agricultural commodities are relatively flat.

Fertilizer stocks are holding most of their recent gains.

Interesting chart from the Divine Ms. M in Columnist Conversations.

Divine suggests that an additional rollover in the iShares Russell 2000 ETF (IWM) could lead to greater volatility:

I made an error in my Wells Fargo (WFC) post. I still have large positions in Nordstrom (JWN) and Dillard's (DDS) .

I was in the process of penning an almost identical article, when Jim "El Capitan" Cramer's "Towel Throwing" post was published on Real Money.

I actually wrote a similar piece earlier in the week -- on a stock I took a trading long in, General Motors (GM) .

While price momentum rules the day, these sorts of research rating moves are a sign of the times.

PepsiCo's  (PEP) quarter revealed continued "flat" results in its carbonated beverages segment.

The secular headwinds facing PEP and other manufacturers are real -- and explain my continued short in the Coca-Cola Company (KO) .

The 10-year U.S. note yield (at 2.35%) has moved several basis points above resistance (at approximately 2.31%).

Interestingly, the 2s/10s curve still remains quite flat -- at only 85 basis points.

This says to me that the next Fed Funds rate rise may flatten the curve even more.

My only current large long is Wells Fargo (WFC) .

Only seven points to go on this indicator! 

As previously mentioned, I have sold the balance of my Twitter (TWTR) . 

I have further reduced the size of my Radian Group (RDN) and Allergan (AGN) longs.

Twitter (TWTR) is trading at $18.27. 

As the share price is approaching the high end of the expected $17 to $19 per share range -- I expect over the balance of the year -- I am trading out of the stock and will patiently await a better entry point. 

For those with a one- to two-year timeframe, I would hold on to the shares.

Regular readers of my diary know I sometimes post things that replicate the theme of the "Tell Me Something I Don't Know" segment on MSNBC's "Hardball With Chris Matthews."

So... "Tell me something I don't know, Dougie."

OK, here it goes:

The two-year U.S. note just hit a nine-year high in yield (1.495%).

Trading at $18, I see Twitter Inc.  (TWTR) as fairly priced over the short term.

On Wednesday Walt Disney Co. (DIS) CEO Bob Iger revealed that Disney took a look at and passed on acquiring Twitter last year. Instead, Disney purchased BamTech.

So, where does that leave Twitter?

I believe Twitter ultimately gets acquired -- but "ultimately" is the operational word, as I do not expect a takeover over the near term for several reasons:

* Last quarter revealed that Twitter continues to face operational challenges that have restricted user growth. These challenges should continue but abate over time.

* After the revelation of Russian election interference on Alphabet Inc.'s (GOOGL) Google, Facebook Inc. FB and Twitter, the U.S. government likely will begin to increase its regulation of the digital gatekeepers. With that likely expanded oversight, operating expenses will be rising, perhaps materially, which further will hamper profitability at a time when the company already is challenged to expand its monthly average users.

* I believe Twitter is very dependent upon the existence of the Trump administration and the tweeting of the president. This could be a slippery slope and represents potential risk to usage if, for any reason, this situation changes.

Though Twitter remains on my Best Ideas List (added in March 2017 at $15.75), yesterday I reduced the size of my Twitter long to small in size based on my risk management discipline (I reduced my overall gross exposure).

I believe the potential for more government regulation and the higher expenses associated with this interference on Twitter's business plus the continued operational challenges facing the company will keep Twitter's shares in a range of about $17 to $19 for the balance of the year.

However, those with longer time frames (2018-2019) should do well with these shares once Twitter absorbs the likely higher expenses associated with possible government regulations and a possible turn higher in monthly users. The shares hold a lot of promise given the uniqueness and potential of Twitter's service.

Doesn't this say it all?

My comrade Peter Boockvar, chief market analyst with The Lindsey Group, spends a lot of time on inflation and the ECB this morning:

The Markit Eurozone Retail PMI is never a market moving number and rarely a focus but the inflation commentary is what particularly stood out in today's release. The headline did rise to 52.3 from 50.8 and that is the best level in 3 months (touched 53.2 in June). The top line was good for many retailers but, "Gross margins continued to be affected by rising input prices in September. Moreover, the rate of inflation was the most marked since January 2014, and sharper than the long run series average. Input price inflation intensified in each of the 'big three' eurozone economies, led by Germany. Indeed, the rate of inflation in the eurozone's largest economy was the most marked in almost 5 ½ years."

We'll see three weeks from today to what extent the ECB is paying attention to things other than the CPI index in deciding how much further to cut their monthly purchases. The euro is basically unchanged. Spanish stocks are bouncing about 1% after yesterdays nearly 3% drop. Spanish bonds are rallying too. Spain sold 5 and 10 yr paper with no problem this morning. The euro 5 yr 5 yr inflation swap is little changed but at the highest level in 5 months. Spain's Economic Minister Luis de Guindos today expressed no desire to negotiate with those that want Catalonia independence "without the full respect of the rule of law."

ECB Governing Council member Nowotny interviewed in a magazine that was published today said "I assume that we will transition to a cautious deceleration at the start of the coming year. Caution means not hitting the brakes abruptly, but slowly taking your foot off the pedal." Knowing how uber dovish Draghi is, no one is expecting anything sudden. The market assumes gradual will be a cut to 40b euros per month in January from 60b (was 80b back in March) with plans to wind that down in the quarters to come. The weapon of mass confiscation that is negative interest rates will stay for a while to come. Here is a chart of the European bank stock index. Note that negative interest rates started in June 2014. While the index is still down 72% from the 2007 top, this chart only goes back to 2014 to reflect what the response was since.

EURO STOXX BANK INDEX

We also saw the minutes from the ECB's September meeting and they reflect what Nowotny said today. They started the 'recalibration' discussion on QE and expressed "concerns about volatility and speed of the euro rise." For perspective, the average euro/dollar cross rate since inception is $1.22 vs the $1.174 today.

The Swiss National Bank, another bastion of monetary extremism, will likely follow the ECB in some form of accommodation removal in 2018 but certainly won't lead it and will do nothing for now. The SNB President Thomas Jordan said while the Swiss Franc has fallen, it "remains highly valued" and "There's no reason to change our monetary policy...It wouldn't be a good idea now to tighten monetary conditions. The situation on FX markets remains fragile." The SNB owns about $85b of US stocks with Apple, Microsoft and Amazon its top 3 holdings. Its bond yields are still negative out 10 years. For those that are desperate for yield in Switzerland, you can go out 30 years and collect annual income of .46%. The problem is that today September CPI printed up .8% y/o/y (EU harmonized), the quickest pace since March 2011.

Lastly, speaking in London, the BoJ Deputy Governor Nakaso remains confident on getting higher inflation. "We believe that the underlying momentum for inflation dynamics in Japan remains intact, as the output gap and inflation expectations continue to improve...There is a good prospect of inflation building up."

Considering where global interest rates lie, just imagine for a moment if central bankers are successful in achieving higher inflation.

And Peter adds:

If there is one thing in particular that I've whined about from the roof tops is why the Fed focuses more on the PCE instead of the CPI. I whine because the PCE has a higher medical care component that is weighed down by artificially low reimbursement rates that the US government pays on Medicare and Medicaid (state governments here too). Well finally it got some recognition as San Francisco Fed President John Williams today said "mandated cuts to Medicare payments damping inflation and key factor holding inflation below 2% target." Hallelujah! I cannot emphasize enough how much Fed monetary policy has been influenced by what measure of inflation they've used. Because they don't rely on CPI, they watched 17 months in a row of core CPI being 2%+ while raising rates just 3 times during that time period. The PCE instead was their guide which as stated was artificially depressed relative to CPI due to government price fixing (and also having a lower housing component).

This means nothing today because Williams doesn't vote but in their search for why the PCE has been less than what they want it to be and why CPI is running above (also because of housing) it, I'm glad that someone is listening to me.

Yesterday I opened the day with an article that explained how passive investing has overcome active investing and gave some explanations of why all dips are bought.

In that article I outlined the conditions that have limited "price discovery" in the equities market and why, I believed, the current state may not be sustainable.

This morning I want to highlight several interviews, events and conditions that, in a normal environment in which there is price discovery, stocks could decline. But, as we recognize, the backdrop today is anything but normal, and for now these concerns are being dismissed by market participants. To wit:

* Rexit Likely: Apart from one's politics, it is abundantly clear to many that Rex Tillerson, the vicar of foreign policy, is a lame-duck secretary of state as his relationship with Trump no longer seems reparable. Tillerson has become ever more isolated, and I make the over/under on his exit at about Jan. 31, 2018. Please read the comments made by Ambassador Nicholas Burns, who served under both presidents George Bush and Bill Clinton, on MSNBC this morning and by Sen. Bob Corker yesterday in his press conference(Tillerson, Secretary of Defense James Mattis and White House chief of staff John Kelly "help separate our country from chaos.") Although the president's behavior, the turnstile of personnel changes and the general dysfunction and disorganization in the White House have become normalized and increasingly accepted by some, it remains likely that tax and fiscal policy initiatives will be delayed and substantially diluted.

This, of course, is ignored by market participants, but the bliss may not last much longer. Unlike many, I believe successful implementation has been incorporated in current stock prices and the likely tax reform will lack substance and will fail to trickle down.

Stated simply, more than ever, our political system is partisan and broken, an unenviable position to be in as we have exhausted monetary stimulation.

* Warren Buffett's Most Reliable Valuation Metric Is Very Extended and The Oracle Says He Plans to Make Some Portfolio Sales: Here is the chart of market capitalization to GDP that Buffett in the past has utilized as a valuation metric:

In an interview with Becky Quick, The Oracle said he has some stocks in his portfolio that are fully priced but he is awaiting clarity of tax policy before he makes a move. He repeatedly has said that stocks are attractive relative to bonds (though fixed income is grossly overpriced) -- a view that I can't quite understand, as comparing a richly priced asset class (stocks) to a grossly overpriced asset class (bonds) and concluding that the richly priced asset class is not rich when compared to a grossly overpriced asset class makes little sense to me. In this analysis, The Felder Report goes even further: 

"So investors can continue to believe the fairy tale that stocks are attractive relative to bonds but they should know that's what it is: a fairy tale. The truth is these are lowest interest rates in 5,000 years of financial history and even in comparison to that incredible statistic, stocks are extremely expensive. It could turn out that bonds fare poorly over the coming decade but, either way, stocks look very likely to fare even worse."

* Extreme Greed: That's where we stand as measured in CNN's Fear & Greed Index and many other investor sentiment metrics. Another, credit spreads, has collapsed while leverage ratios have ripped higher. 

* The Hope Vs. Reality Economic Gap Has Rarely BeenWider: The equity market continues to be indifferent to the message of the bond market (the 10-year U.S. note is yielding 2.33% and implies under 1% Real GDP). Here we look at the difference between the soft and hard data:

* Extended Market Sectors: This chart from Mark Newton exhibits how Transports are an important group to watch. Yesterday rails slipped, perhaps a sign of exhaustion:

* Investor Sentiment Elevated: Household ownership of equities is at a near-record level. 

My judgment is that it is not different this time and stocks are unattractive on almost any time frame.

I am an outlier.