Good morning. Ugly, ugly, ugly. Can I say it one more time??? UGLY! Yesterday was the worst day for equities in almost 2 months (July 31st). The Dow got bludgeoned 264 points,1.54%, finishing at 19,946, the S&P 500 was walloped losing 32 points, 1.6%, closing well below 2,000 at 1,965 and the Nasdaq got bazooked (I just created a verb!) ending down 88 points, 1.9%, at 4,467. Why the drop? Well doing my research from multiple sources there wasn’t just one reason. Apple’s (down 3.8% yesterday!) problems with its operating system and “bendgate,” geopolitical conflicts and their implications on countries’ economies and a market that may a little tired all converged. Investors also have been following the divergence between small-cap stocks, which have been weakening for a while, and the broader market such as the Dow and S&P. In a solid bull market all the sectors should rise. And let’s not forget about the stronger U.S. dollar which reached a 4 year high against a basket of foreign currencies and probably clipped off 3rd and 4th quarter earnings. All in all the bull’s yoke just got too heavy. It was like Jenga and yesterday the tower fell. We’re still in a bull market and way over due for a correction so hang in there. Days like yesterday hurt but are necessary for a healthy market. Our economy is doing better, if not the best of the West, our military remains the dominant fighting force in the world, the U.S. government is stable and our banks are healthy and getting more so every day. In a world of worsening chaos the U.S. is an island of calm. And capital flows to stability, to calm. You and I may go to sleep tonight worried about spouses, children, bills or work but you will not go to sleep worrying about an RPG hitting your house.

This morning the Dow is bouncing (please don’t be a “dead cat”!) up 98. The Asian markets actually hung in there pretty well closing mixed and the European markets are trading the same. Pretty good considering yesterday’s carnage of U.S. equities. Want another bullish signal? CNN’s “Fear Greed” Index is at 13! (see below).

Oil hung in there well considering equities whacking. WTI fell 27¢ closing at $92.53. Brent even gained a nickel to $97 even. Yesterday’s price action is a good omen for equities. Now in the past I’ve been accused of wanting oil prices higher which for many of you at first blush is what you don’t want rationalizing higher oil prices means higher costs for your business and personally at the pump. But I do want higher oil prices (within reason). Why? Because when oil prices are creeping up the world economy is doing better which means business is doing better. An improving economy means increased energy demand which supports energy prices, including oil. I’m sure the bombing of ISIL’s refineries helped support crude though. This morning WTI is up 62¢.

Natural gas rose an even 6¢ yesterday closing at $3.971. Natty’s price action was surprising considering the EIA’s weekly natural gas storage report was bearish. Market expectations were for a 92 Bcf injection with the actual injection 97 Bcf. The U.S storage deficit is now 11% below last year and 13% below the 5 year average. Not too bad considering those numbers were 50% when we exited winter at the end of March. We have 7 more weeks of injections left (including this week) and we should end up with about 3.6 Tcf in storage going into winter which is 6% below both last year and the 5 year average.

Looking at the weather forecast this morning the cold/cool air mass that has been making its way across the U.S. from west to east seems now to be vacillating between the west and the middle of the country and has modified somewhat. Even though the October Nymex contract settles today traders seem to be taking the morning off with natty being down an insignificant 2.7¢. Take my word for this. Traders may not be trading but they are keenly tuned into their screens with fingers at-the-ready if the market gets “exciting” as the day progresses.

The price of the average price of gasoline may start with a “2” across much of the country. Gasoline prices typically decline in autumn and this year they are being pulled even lower by falling global oil prices. By the end of the year up to 30 states could have an average gasoline price of less than $3 a gallon. The average in Springfield, Missouri, is already below $3. At the current national average of $3.35 a gallon, gas is a dime cheaper than a year ago at this time. Fall is when refiners are allowed to switch to a cheaper blend of gasoline for the cooler months and driving demand declines after summer vacations have ended. Last year the national average fell 28 cents per gallon between Sept. 1 and Dec. 31. This year, gasoline had a head start. It entered September at its lowest level for the beginning of the month in four years — and the price of crude oil was rapidly heading lower. The drop in global crude oil prices is somewhat of a surprise. Despite increasing violence and turmoil in the Middle East, the world’s most important oil-producing region, the global price of oil has fallen to $97 a barrel, close to its lowest level in more than two years. That’s partly because new technology has allowed U.S. drillers to consistently increase production from fields in North Dakota and Texas, adding to global supplies. At the same time, world demand is not growing as much as anticipated because of slower economic growth in China and Europe. However, some analysts predict oil will soon head back up as OPEC countries respond to lower prices by cutting back and consumers respond by burning more fuel. So enjoy it while you can! Have a good weekend.