Good morning. On Wednesday we saw a light at the end of the tunnel and believed it was the Fed holding it. It turned out not be the Fed but a train. Wham! We got run over. Serious damage. Carnage. Triage applied. No survivors with the Dow losing the most points it has in a more than a year. That would be 335, or 1.97%, ending at 16,659. And that was the good news. The S&P 500 and the Nasdaq were worse with the former losing 421 points, 2.07%, to 1,928 and the latter off a whopping 90 points, 2.02%, to 4,368. Wednesday marked the biggest one day rally of 2014 and Thursday marked the biggest drop. That’s the first time those extremes have been hit on back to back days in 17 years! Leading the market down yesterday were the energy stocks which have recently been getting pummeled as crude prices have fallen around the globe (more on oil below). Last week and this I’ve been talking about how the Russell 2000 was at multi-year support and the S&P was at support dating back to Q4 of last year. Well folks, both of those supports were broken yesterday, and when they were the selling came flooding in. Not helping us at all was Mr. Draghi’s, the president of the ECB, comments yesterday in Washington D.C. saying the ECB had done all they could to strengthen the economy in Europe and that the real battle had to be waged by political authorities to reform the economies there. The austerity camp (Germany, Austria and Finland) defeated the monetary expansionary camp (France, Italy and Greece). Interpretation: no additional QE.

Folks, volatility is off the charts! We’ve only had 7 trading sessions in October and we’ve already recorded 5 days where stocks have moved more than 1%. That’s as many 1% moves as we saw in the prior 5 months combined! The Dow hasn’t seen this many big swings since August of 2011 when the U.S. government lost it AAA credit rating. Capital is frightened. Not just in the states but around the globe. The violence of Tuesday, Wednesday and Thursday of this week is forcing capital at the margin to seek safety.

I’m not even going to comment on the overseas markets because they’re just following the train wreck that happened here in the states yesterday (Why am I thinking about Charlie Sheen?!) This morning I’m continuing to see a lot of volatility with Dow futures ranging from +35 to +91 since I’ve been writing this report and get this, now that the Dow is open its up only 2. In equities it takes more than one or two days for a market to go through a move, and I’m specifically talking about a down move. I’m really worried about any move up in stocks being nothing but a dead cat bounce for with the aforementioned supports being broken they now become resistance.

Oil just continues to get massacred! Yesterday WTI lost another $1.54 closing at $85.77 and Brent fell another $1.33 settling at $90.05. So where are we? Low, that’s where. WTI hasn’t been this low in almost 2 years (December 2012) and Brent is trading at its lowest price in over 2 years (June 2012). The European benchmark crude’s price has fallen 20% from its peak this year in June. That folks defines a bear market. Shale oil is set to boost U.S. production to the most in 3 decades, while last month supplies from OPEC rose and Russian output neared a post-Soviet record. Saudi Arabia, the world’s largest exporter, cut prices for November exports to Asia to the lowest since 2008. So supply is increasing. Demand? Going down with Europe teetering on falling back into recession and growth in Japan and China is anemic. Not a good combination to be long of Texas Tea. This morning the bears continue to feast with WTI down 74¢.

The EIA released its weekly natural gas report yesterday showing the U.S. injected 105 Bcf into storage last week. Now the number by itself was large beating last year’s 91 Bcf injection and the 5 year average of 84 Bcf but was ever so slightly less than the market’s expectation of 108 Bcf. Prices immediately popped on the news but within an hour or so settled back down and at the day’s end the market closed down a meaningless 1¢ at $3.845. The forecast today is pretty much the same as yesterday and having no consequence with the market taking back yesterday’s penny loss being up 1.7¢.

Boy, I’m sure glad it’s Friday. I need a weekend.