Like most, I will be immersed in earnings reports tonight. 

As always, instant analysis (though often embraced by the business media) is not my preferable course so I will be reading the reports thoroughly and listening to conference calls.

An observation: 

Despite being within 1% of the all-time high in the S&P Index, this week's feature was a number of investment potholes --relatively large sized individual fundamental disappointments followed by marked stock price drops.

Celgene (CELG) , Bristol-Myers (BMY) , Charter Communications (CHTR) , Universal Health Services (UHS) , McKesson (MCK) , Amerisource Bergen (ABC) , Liberty Interactive (LVNTA) , American Airlines (AAL) , Walgreens Boots Alliance (WBA) , Hershey (HSY) are examples of those potholes. 

The market is no longer homogenous -- and opportunities to deliver good investment returns on both the long and short sides have developed. 

Know what you own and why.

Twitter (TWTR) is the world's fair today. I am not selling.

I am over-my-skis short the S&P 500 ETF (SPY) .

Pray for me.

Thank you.

I dont have a dog in the Microsoft (MSFT) and Intel (INTC) hunts -- but the stocks have run up ahead of this afternoon's EPS releases (to be delivered after the market close). 

Unless there are clear beats relative to expectations, some profit taking could be in order.

CVS (CVS) and other pharmacies are getting hit on this news. 

Here is the St. Louis Post Dispatch story that circulated today.

Subscriber comment of the day (and a strong contribution From Carley Garner). From Thomas C.:

Some sage advice from Carley Garner on RMP today: "We aren't in the camp that believes long-term investors should make the rash decision of getting out of stocks altogether. Nor do we believe speculators should 'bet the farm' on an imminent crash. However, we do believe now is a good time to reflect on where the markets have come from, how they have behaved in the past in similar circumstances, and proceed with both caution and logic. Everyone looks like a genius in a bull market, but it takes a true genius to set aside the need for greed in favor of being rational."

A frequent theme of mine is the lack of follow-up and accountability by commentators and "talking heads" in the media of the many ideas that have soured. 

Losers are part of the game -- and those who don't confess to mistakes are either lying or, as Grandma Koufax used to say, are "trying to sell you a bill of goods." 

The refrain of emphasizing the winners and sweeping the losers under the carpet is a constant diet that viewers are exposed to. 

Celgene (CELG) and Valeant Pharmaceuticals (VRX) are recent examples -- but there are many more. And there will be many more at the inevitable time the markets take a different course than taken over the last few years. 

The expressions "I don't know" and "I was wrong" are too infrequently used -- in large measure because those "talking heads" paraded in front of us are attempting to sell a service (and they want to sound smart and invincible). 

Avoid them like the plague and keep them away from your portfolios. 

Always do your own homework and never lose sight of your risk appetite/profile and trading/investing timeframes.

Little has transpired since I left for lunch.

However, a strong bid has come into retail. Home Depot (HD) , Kohl's (KSS) , Nordstrom (JWN) , Foot Locker (FL) and Nike (NKE) have been flying higher.

My only long, Dillard's, Inc (DDS) , is +$1.60.

I have been adding on weakness.

I expect Amazon (AMZN) to beat on the top line and to miss on the profit and cash-flow lines in light of higher expenses in the quarter -- coming from a large, developing investment cycle.

I have lowered today's Allergan (AGN) buy average to $177.35 and I have added to my Hartford Financial Group (HIG) long.

I will be out of the office for a lunch meeting.

Back at around 2 p.m. ET.

We've hit a 2017 high for Radian Group (RDN) -- it's a monster.

I would be a buyer under $18.50.

Wells Fargo (WFC) , my largest individual long equity position, is approaching its July 2017 high; I say it breaks through.

After the Twitter (TWTR) quarterly report (see post below), I am raising my expected trading range over the next three to six months from $15-$20 to $17-$22.50.

Here are note from Twitter's (TWTR) conference call:

· Audience and engagement is growing, broad-based both in the U.S. and internationally, with majority of growth being in top-10 markets.

· Work to increase relevance is making an impact.

· Focused on making Twitter a safe place for everyone; in 2017 rolled out a number of product updates with an increased sense of earnings, knows this is not enough, but taking a more aggressive approach (previously published coming safety calendar).

· Making progress on a return to revenue growth.

· Q: Long-term margin goals?

o A: No change to long-term thinking. Expense base will selectively grow, margin improvement is more likely to come from revenue growth vs. reduced expenses.

· Progress on revenue growth

o Feel good about progress.

o Much larger audience that is growing, better advertising products.

o Had six quarters of double-digit daily average user (DAU) growth. Growth driven by product changes.

o Prices are down 40% y/y in aggregate, bigger audience, lower prices is better value.

o Focused on communicating to advertisers strength of video markets.

· Doesn't give revenue guidance.

· Had over 830 events this quarter. Hopes to leverage industry and video progress.

· Growth will be about execution and diversification of their revenue.

· This quarter conducted 43% more advertising studies y/y.

· Data enterprise grew for third quarter in a row.

· Self-serve advertising returned to growth this quarter as well.

· Effective CPM is a combination of click through rate times cost per engagement.

o CPM cost has remained stable last few quarters, has reached a stability point, which they believe can help to drive revenue growth.

· Playing a lot with matching people to show people better topics of interest in the timeline

o Just launched "what's happening now" module, which is focused around sports. So if you liked sports you would have seen discussion around last night's World Series. As they personalize Twitter more it will have a direct impact on results.

· Live business is different than competitors

o Leveraging strength of passionate audiences, surrounded by specific needs of audience which combines conversation all over Twitter into one curated timeline.
Television

· Q: DAUs were tracking up 12% in the second quarter, reporting 14%; is that correct that you saw a notable pickup in last two-thirds of quarter?

o A: comment on Q2 meant to be directional, doesn't think it makes sense to break it out.

· Q: Video discovery in general, will there be a dedicated video experience?

o A: adding more personalization across the board to Twitter, biggest effort is to apply machine learning to every tweet, so if you infer/say you are interested in something goal is delivering you the right image/content at the right time.

· Q: So the ultimate goal is to show you what you want to see in the main tab?

o A: That is correct.

· A lot of strength in machine learning, applying it to core of the product, are hiring in this area, feels confident in application and expertise.

· Every day 2 million or more new users come to Twitter. Of these new users 2/3 have not been to Twitter in last 30 days, 1/3 users who have not been to Twitter before.

My average price on today's Allergan (AGN) buy is $177.87.

I am now making an aggressive trading bet -- on top of my investment shorts -- that we test yesterday's lows.

This morning I added to Allergan (AGN) on weakness in biotech -- a true contrarian and counterintuitive bet considering the struggles of Celgene (CELG) et al.

However, I am still only medium in size in my AGN position.

Jim "El Capitan" Cramer is talking with Q and David Faber about the violent group rotation going on this week in the S&P 500 Index.

But I would remind everyone that leadership changes historically are more often associated with down markets than up markets.

I recently have quoted Morgan Stanley's Chris Metli in my series of articles on volatility.

Here, from Zero Hegde, Metli offers his view as to whether yesterday's selloff has legs.

As an observation, I find -- and this is characteristic of a mature bull market -- that many investors, strategists, commentators and talking heads are just taking shots in the dark on stocks these days and are not adjusting their outlooks for changing and advancing stock prices.

If a stock has lagged, such as Celgene (CELG) -- recently recommended aggressively in the business media -- it's a buy.

If a stock has rallied, has a good chart and appears to be breaking out -- such as Amgen (AMGN) , also recommended in the business media -- it's also a buy.

Heads you win, tails you win, I suppose.

Though I praised Bobby Lang by name in a post below regarding his excellent technical take on Celgene, I only criticize by category.

But you all get my point!

Risk rises with advancing prices, and the reward vs, risk -- and upside versus downside -- typically changes unfavorably.

Don't use price targets; consider probabilities of scenarios and upside vs. downside.

The Lindsey Group's Peter Boockvar on the European Central Bank (ECB) decision:

The ECB is saying that they will cut in half their QE purchases in 2018 to 30b euros per month thru September. He couched it in dovishness by saying they can always increase it if needed and that NIRP will remain in place "well past" the end of QE. They will also reinvest maturing securities just as the Fed did with their balance sheet and this will be "for an extended period of time." Keep in mind though, if the ECB is actually successful in generating inflation closer to 2% (they are at 1.5%) sooner rather than later, this could change again.

Bottom line, this is pretty much exactly as has been telegraphed. To quantify the reduction in buying next year comes to 450b euros ($530b) from the current run rate. Add $450b of liquidity being taken out by the Fed from Q4 thru the end of next year and we'll see about $1 Trillion of less liquidity next year. The euro is falling as some thought maybe they would cut QE to as little as 20b euros per month but it still is trading in a range of $1.17-1.18 lately. The German 10 yr yield is down by 3.5 bps to .45%.

My pal Ben White at Politico is saying that former Federal Reserve governor Kevin Warsh and current Fed Chairwoman Janet Yellen are out of the Fed chair race and that Fed Governor Jerome Powell and Stanford University economist John Taylor could be chairman and vice chairman, respectively, of the Federal Reserve.

Celgene (CELG) is down around $13 in premarket trading after disappointment over its third-quarter results. 

This stock has been widely heralded on "Fast Money" and elsewhere, mostly on technical grounds.

But I must say, our Bobby Lang showed a lot of discipline here in jettisoning the name (and his call options) as it began to roll over recently.

Kiss the iShares Nasdaq Biotechnology Index EFT (IBB) goodbye, at least today!

The better-than-expected release from Twitter (TWTR) caused me to re-establish a small long position in premarket trading under $18. 

As mentioned recently when I sold the balance of my stock at $18.50 a share, I have thought that TWTR would trade from $15 to $20 over the next few months.

I still believe so, but my conviction that it can trade toward the higher end of the range has increased with the delivery of this morning's report.

The positives:

* The overcalculation of daily average users (DAUs) - 1-2 million viewers/quarter -- is probably less than feared.

* Monthly average users (MAUs), after being flat in the prior quarter, rose by four million users.

* Though revenue was light, expenses were well under control.

* The company for the first time ever provided positive GAAP guidance for the fourth quarter.

More later.

My good friend Peter Boockvar, chief market analyst with The Lindsey Group, considers what's ahead for the bond market while also checking out a host of overseas economic data:

I'll just say this ahead of the ECB meeting and Draghi press conference. They created one of the biggest bubbles in the history of bubbles in their bond market and now they are going to tell us straight out that it's time to reverse itself (as dovishly as possible). To quantify the extensive influence they have had on bonds, ECB QE has been 7 times bigger than net issuance of eurozone government debt. The Federal Reserve QE never was more than net issuance. I continue to loath the European bond markets and I still like the euro. Most European stock bourses, while cheaper than the US, I think are now less attractive after the run over the past year.

As measured by this index from the CBI in the UK, retail sales in October literally tanked. Its index fell a whopping 76 pts to -36 from +42 in September, well worse than the estimate of +14. It's the worst print since the depths of the recession in March 2009. CBI said "It's clear retailers are beginning to really feel the pinch from higher inflation. While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand." This data point is all the more reason why the BoE needs to raise rates on November 2nd and get some grip back on this rise in inflation. The BoE unnecessarily panicked after Brexit with a rate cut and more QE (including nationalizing its corporate bond market) which in turn sent the pound much lower than it would have gone and now it has a stagflation problem on its hands. The pound is lower on the news but gilt yields are holding steady. The FTSE 100 is up on the weaker pound.

Even though the Swedish Riksbank said "Economic activity is strong and inflation is close to the target of 2%" they still held its repo rate unchanged at -.50% and doesn't want to raise it until the summer of 2018. They also want to continue with QE. This out of control policy is all because they don't want a stronger currency god forbid. Inflation ran 2.3% in September and they have a massive housing bubble on their hands. Yields are negative out 5 years and you can buy a 20 yr bond yielding 1.29%, thus locking in a REAL loss with inflation running almost double that. How is this going to end well?

Economic sentiment in Italy rose to the best level in 10 years in October. While still 10 pts below its 2007 peak, we will take what we can get in terms of growth from Italy. The 1 pt m/o/m rise was led by 'retailers' confidence.' The Italian stock market is higher by .9% and up by 18% year to date. I recommended buying Italian stocks more than a year ago and my conviction was confirmed when last October at a conference I asked the crowd whether anyone thought of investing in Italy and not one hand was raised.

Reflecting again the rebound in global trade that we've seen for most of this year, Hong Kong exports in September rose by 9.4% y/o/y, well more than the forecast of up 5.9%. Exports to China rose by 7.5%, to the US by 4.1% (but after falling by 5.5% in August and are only up .4% ytd), to Japan by 18%, and to Germany by 39% to name a few destinations. Imports also exceeded expectations with a 9.7% y/o/y rise, almost double the forecast of up 5%. The better trade data came out after the Hang Seng close which ended the day .4 lower. A key thing of note in Hong Kong has been the spike in 3 month HIBOR (interbank lending rate) recently. It was up 13 bps overnight to the highest level since April at .91%. It's up for the 9th straight day and started this move at .76%. Because the Hong Kong Monetary Authority essentially imports US monetary policy via the peg, this move in HIBOR is closing the gap with US 3 month LIBOR. Keep in mind that this rise in the cost of capital comes with a major bubble in Hong Kong property where good luck buying a 500 sq foot apartment for under $1mm US dollars.

3 MONTH HIBOR

I am adding to my SPDR S&P 500 (SPY) short at $256.05 into the European Central Bank's decision, which could disappoint some investors.

I re-established a small Twitter (TWTR) buy at under $18 in premarket trading after the release of an earnings beat and good daily average user (DAU) and monthly average user (MAU) data.

More to come.

Ken Polcari and I participated in Mike Farr's "FarrCast" on Tuesday evening.

Let's go to the tape!

From Mark Yusko:

From Lisa Abramowicz: