Good morning. After three sucky days equities rebounded hard for us with the Dow climbing a whopping 155 points, 0.9%, the S&P 500 adding 16, 0.78%, to 1,998 (still below 2,000 ) and the Nasdaq lopping on 47, 1.03%, ending at 4,555. Yesterday was the best one day percentage gain for the Dow and S&P in more than 5 weeks. Nice! Driving the market higher, other than the fact I think it was somewhat oversold, were two factor. First, the Commerce Department said sales of new single-family homes rose 18% in August to as seasonally adjusted annual rate (that’s the way the always measure it) to 504,000. This was hugely greater than market expectations of 426,000. Additionally, July’s number was revised higher by 15,000. And you regular readers know how much stock I put in the direction of revisions. Second, investors welcomed the dovish remarks by Mr. Charles Evans, the President of the Chicago Fed noting the slack in the labor market and that he’s uncomfortable with calls to raise interest rates sooner rather than later. Now I don’t put that much stock that Mr. Evans’ comments really influenced equities that much for he is known to a “dove” and he is not a voting member this year. Going back to new home sales, expect a revision downward next month. Not to be Debbie Downer but don’t forget that on Monday sales of existing homes for August fell 1.8% from July ending four months of gains.

After a very good day yesterday Asian stocks closed mixed but the European markets are trading red and the U.S. market are bleeding profusely with the Dow down 102 points. Hey, we’re still in a bull market folks. For the year the Dows is up 3.8% and the S&P is up 8.1%.

WTI rallied big yesterday closing up $1.24 to $92.80 but it’s cousin Brent didn’t feel the love rising only ten cents to $96.95. Note that spread is once again closing being at $4.15. It will eventually one day again come in to about $0 once the transportation constraints on WTI are relieved for all things being equal WTI is a marginally better quality crude than Brent. Giving WTI the boost yesterday was the DOE weekly crude and products report which was quite bullish showing aggregated inventories (crude, gasoline and distillates) falling 3.9 million barrels with expectations of a 1.7 million barrel decline. WTI’s price jump was all the more impressive considering the U.S. dollar hit a 4 year high against a basket of major currencies.

It’s really hard for me to get bullish of Brent. When ISIL’s oil facilities (really Iraqi facilities!) are bombed by U.S., Saudi and UAE jets and Brent doesn’t get a bid it’s a very bad omen for the bulls! When a market doesn’t go up on bullish news it’s not a bull market. Brent is going to need Saudi Arabia, OPEC’s swing producer, to cut production to get a bid. This morning WTI is getting some follow through being up 36¢.

Natural gas popped a surprising 9.5¢ closing at $3.911. What’s going on right now are traders are trying to find the weakest price spots in the market. Who’s weaker? The shorts or the longs? They pushed it down a couple of days ago and didn’t find sell stops so they turn around and push it up yesterday looking for buy stops. The bottom line is the market currently is comfortable at the $3.90 level where we’ve spent more than two months waffling around. Winter is just around the corner and that is going to change.

You know what today is don’t you? EIA natural gas storage report day! Whee! The market is looking for a 92 Bcf injection. This compares to last year’s 82 Bcf for this week and the five year average of 79 Bcf. The weather forecast is little changed with the cold, actually better described as cool, air mass slowly making its way west to east across the U.S. The weather has been fantastic this week in the Midwest and east and you’ll get more great weather next week. The farmers are having fantastic weather for their harvest, which is massive! This morning traders are pushing natty back lower 7.0¢ to $3.841. Let’s see how it’s trading at 9:31 Am CDT.

I ran across some data that surprised me. With natural gas prices being so low over the last 4 or so years I figured that natural gas would be the natural (pun intended) choice to be the primary heating fuel in the U.S. Not the case. On a national basis, except for the northeast, natural gas has been losing market share to electricity. There are various reasons for this including the migration of the population to the south and west and improvements in heat pump technology. However a big part of it is the home builder’s decision on what to install. And wiring a home for electric cooking and heating is cheaper than plumbing for natural gas even if it means higher operating costs over time for the homeowner. For example, nationally, only 20% of clothes dryers use natural gas. Sad. Have a good day and remember to aspire to inspire before you expire!