Continuous 'grooming' of markets - to tolerate (as mildly as possible) what's increasingly an obvious series of rather overt 'hints' by more Federal Reserve officials, is either being responded to with more market 'complacency', or one can prefer to view Thursday's rather uninspiring action is reflecting a renewed concern that the Fed will move. 

Dismiss it or embrace it; the Fed's desire is clear; and the message generally is a contradiction in terms: the idea that things are so bleak the Fed won't be raising rates beyond the initial move, or that it will be a series of hikes. Well it won't be much because the Fed 'dare not' really move rates up; looking at our Debt levels and what gets added tells you that. 

There is another point: perhaps the Fed actually (and behind the scenes) now believes that rates going higher, will 'increase' deflationary pressures (they call that 'lower inflation' typically), rather than reflect an economy with real traction. That might be an irony if it's the case, as we know they can't stomach anything that really increases our debt service levels given that growth is so mediocre. 

How would they 'package' that tactic, if indeed it's the case? Hike rates at the same time as Government tries to take the 'edge' of too-steamy markets with a series of tax or policy moves that are constantly debated, but not implemented. Sure, we believe the Fed does not 'really desire' suppressing recovery or even wage levels; though they are left with few options because of the monetarism failure by keeping 'emergency' measures 'on' for too extended a time. 

We don't have any conviction about Fed motives here; actually suspect they don't either! We did, and still do, believe that Stanley Fischer was elevated to the Vice Chair position basically to steer the exit from an impossible Fed trap, from the corner that they've painted themselves into. 

The conclusion may be that they 'missed an opportunity' repeatedly; to raise rates without a particularly deleterious effect on the economy. We've believed they should get off the near-zero rate for some time; and now either way they are dealing with a sub-optimal growth prospect for a majority of citizens. 

Consumption rates are down, while new debt levels are up. We've assessed it as a trend of borrowing to survive by many citizens (they're citizens not simply consumers), not to thrive. And those that thrive by virtue of high asset prices, are starting to become nervous about perpetuating very old trends. It's not just in 'Retail', where it's handy to blame the online buying trends, or offload issues to 'nervousness' because of rising terror concerns. Though all that's a part. 

The currency wars (competitive devaluations and opposition to trade deals like the protesters in Manila represent... the idea that while the deals lower wages and output in the U.S., something similar happens at the other end, where low incomes and costs gradually move-up disproportionately, making survival at a basic level tougher. Same outcome; different perspective. 

Bottom-line: an uninspiring Thursday session did behave as we outlined; but has everyone focused (legitimately and with common sense) upon challenges on the global security scene; and not so much on the impact or intended thrust of a forthcoming monetary policy 'rate' move, to augment the policy change as is already evolving, in the most gentle way a Fed can possibly engineer it.                                         

Daily action - to 'complement' the preceding remarks; my point is that it feels like something is brewing, and not merely quiescence before a key Holiday of Thanksgiving. There is a palpable undertone of unease, and I personally had to console two lovely young ladies last night, nervous about flying home to NY for Thanksgiving (and yes I encouraged them to fly and enjoy their families). 

It was as New York Mayor Belasio and Police Commissioner Bratton (many of course remember his fine work in Los Angeles) addressed the community, but somehow seemed little solace. However not so troubling (if candid) as French officials, indicating they must have the State of Emergency and clean-out the Islamists (I won't say just ISIS, as it's not 'just' ISIS), who would like to get to a point where they might have biological or chemical agents. I'm not sure it was a wise move to interject that into the discussion; although given the barbarity shown to innocents (which by the way is everyone they encounter) it's clearly on the minds of security officials. 

That also supports the notion that spending a year with slow responses until Russia moved in, not only elevated Putin on the world stage (even legitimately as Russia has a long and torturous history dealing with Islamic Terrorism), but besides making other leaders look indecisive, gave the enemy too much TIME to finesse communications and refine their horrific tactics. (And then we learn that the very software programs or 'apps' that allow encrypted communications were in a couple cases like 'Signal' -not the stock trading one by the way- part of a funding program by our Government. Diane Finestein is said to be aghast at this when a reporter told her that.) 

In sum: flat overnight after closing a Dec. S&P 2082 afternoon short-sale. I'm also well aware that the Fed Vice Chair emphasized rate hikes basically after the NYSE closed; not that we didn't hear much the same all day from others. 

Earlier today I happened to see a story about a speculator who just got a huge $131,000 margin call, resulting from an overnight risky biotech stock position. The question about his online broker perhaps never extending him credit is yet another issue; since he never had more than $ 37,000 equity in the account. If anyone wants to know about risks and missteps by bulls in this kind of market, or for that matter questionable brokerage practices that encourage impossibly high debt levels (if the trader files bankruptcy, then the brokerage apparently is hung-out to dry too; hence one can debate which is the 'greater fool' there). 

For our purposes I thought I'd just provide some outlines (my own and others I have picked-up over the years) for aggressive trader approaches, which most investors will never have to encounter, or perhaps all our seasoned members here of course already generally know about: 

• Never trade to "come-back" and pay people back that loaned you money.
• Do not stay in a trade overnight if it can ruin you by morning.
• Avoid even entering a trade that can really hurt you, unless you are willing to pony up hedging costs (I call this 'never bet the 'back 40', as if acres).
• Harvest gains regularly; rather than being greedy, fast nickels are better than slow dimes. (That's partially why many traders go home flat; or take partial gains hoping to 'leave the casino with at least what they came in with' that morning, if possible.)
• Resist helping friends trade a lot, you might just neglect your own trading efforts or hurt yourself and friends. (unless you both understand individual responsibility or just 'paper trading' to enlighten young people).
• Abstain trading seriously low volume stocks in which your own exit might amplify your losses or minimize gains (stocks where you can move price).
• Reject margin for leverage - in the long run most lose. Diversify at least partially or learn to hedge. (Most traders 'do' have a margin account; but just for the purpose of being able to short or use options, while avoiding temptations to use leverage, as even a straddle isn't assured if market action becomes stagnant in a very narrow range through an expiration.)
• Avoid shorting unless you are prepared for a negative balance, and never hold overnight or you risk losing it all over time. (Again; either ahead with a portion at least equivalent to what you've risked plus some gain pocketed or simply stand aside and look at the market the next day. But this can be even more risky if one is leveraged, as that's where wipe-out risk exists.)
• Avoid overconfidence - there are a lot of smart traders, yourself included - and there are a lot who have inside info and/or can NOT lose because they have illegal or questionable advantages. (Some are 'rumored' even to trade against their own clientele, such as issuing a stock upgrade and then selling their house shares into any rally that results from their 'push'.)
• Set fairly firm rules, follow them so psychology or influences and bias are not too excessive factors. If losing big due to exogenous events (such as being long and suddenly a global event or attack occurs), don't be afraid to dump at-market rather than 'dumping at limits' or you could be chasing the downside for hours. (In the current era that can have one selling lows in a stock or Index, because of the High Frequency Trading or hedgers of course 'trying' to make things go the other way, even if they subsequently revert to the direction of the original break. There's always another day. (Generally as long as able we prefer buying dips or selling rallies always, so I'm mostly referring to investors with huge single-issue equity stakes, if circumstances and prospects truly change dramatically on a dime.)
• Always look at an equity trade from the opposite side; asking what is the holder of the opposite side of your trade thinking about prospects; as are they scared, greedy, ready to jump to take profits, etc. Basically thinking and not presuming anyone has 'all the answers' about any trading move.

That's just a few thoughts; perhaps one of these or others I've noted over the years is useful for someone; or just as a reminder of reasonable disciplines I'm pretty sure most of us have in mind, or embraced many years ago.

My suspicion: Friday may become overall a down-up-down session, with still limited interest in holding long trading positions over the weekend.