IMPORTANT. As you know the Morning Energy Report (now named “Blog”) is being delivered to you via a link to our website where it and a plethora of other information and energy data are available. I’ve received feedback from a few readers they are having difficulty reading the Blog, specifically, not being able to scroll down the page to read the entire report. I would greatly appreciate you providing me feedback if you are having this problem or any other. I want to ensure you have the opportunity to read the most valuable morning report in the industry!

Good morning. After bivouacking for a day U.S. stocks continued to rebound from their October 16th low with the Dow posting a gain of a nice 188 points, 1.12%, to 17,005, the S&P 500 adding 23, 1.19%, to 1,985 and the Nasdaq leaping 78 points, 1.75%, to 4,564. Note the Dow is once again above 17,000 and the S&P is only 15 points from again breaking above 2,000. The S&P’s close was technically significant because it ended above the 50 day moving average. Energy stocks, which have been unadulteratedly pounded on falling oil prices, were the day’s biggest gainers up 2.2%.

The economic data was mixed yesterday with Durable Goods very disappointing with the Commerce Department noting orders fell 1.3% in September with The Street anticipating a 0.5% gain. Now one must be careful looking at the gross number alone for an airplane order pushed into or out a month can radically change the number. However, drilling down the data was still disappointing with nondefense goods excluding aircraft, which is viewed as a proxy for future business investment, falling 1.7%. This cannot be spun anyway positive.

On the bright side (which is the side I always like!) the Conference Board reported its Consumer Confidence Index rebounded in October to 94.5 from September’s 89 and far above economist’s estimate of 87. This is the highest level in 7 years. With the holiday season right around the corner this is report will make retailers very, very happy.

All the major Asian bourses closed materially higher overnight following U.S. equities and European equities are all trading green but here in the U.S. investors are starting out cautious with Dow futures up 38 but the S&P and Nasdaq marginally negative. Call it “chatter.” Today the FOMC ends its two day meeting and with no press conference schedule investors will parse and slice and dice (just like the old Ronco kitchen device!) the post-meeting communique. English majors will beget a day’s work. My take is the Fed will say they’re done buying assets but an interest rate hike is not imminent. All with the caveat they are “data driven.”

Oil prices bounced yesterday with WTI settling up $0.52 at $81.42 and Brent rising $0.20 closing at $86.03. It appears WTI prices under $80 brought out the bargain hunters. I also believe the rally in equities yesterday pulled some bulls in. Additionally, oil prices have fallen 25% since the end of June and the proverbial rubber band is stretched pretty far and a correction is overdue. Yesterday after “the bell” the API released its crude and products inventory data showing aggregated inventories were down 3.5 million barrels last week from the previous one but as I’ve mentioned quite a few times, take the API numbers with a grain of salt for reporting is voluntary. Today the DOE releases its data which carries much more weigh because reporting is mandatory. This morning the bulls are increasing in number with WTI up 91¢.

Courtesy MDA Information Systems LLC

The November natural gas futures contract jumped 8.8¢ yesterday closing at $3.649 on penultimate day which is the day options expire and the day before the underlying futures contract expires which is obviously today. Yesterday’s gain was the largest one-day gain for natty in 3 weeks. My antennae are raised for the November Nymex contract traced out a “reversal” to the upside and I always pay attention to reversals. In my opinion, reversals are one of the, if not the, most important technical indicators. I believe natty got a boost from the cash market with utilities in the east looking at a material increase in their load forecasts for the next few days due to much colder weather. It’s going to be a cold Halloween night for those of you in the east and Midwest with temperatures 10 to 15 degrees below normal. Dress those little goblins warmly! The bulls had a fun day yesterday but they certainly aren’t getting any helped from the forecast for the 6-15 day term when normal to above normal temperatures cover most of the U.S. and Canada. Natty is starting out expiration day quietly being up 1.1¢ as I write.

I’ve been following CNN’s Fear/Greed Index (below). A couple of weeks ago it was pegging 0 and 1 and it has now moved up to 20. Albeit only one indicator it tells me not to be bearish of stocks for it means money is on the sidelines. The time to get bearish is when the needle is deep in the green. Always remember that even with all the fundamental and technical analysis markets are a reflection of human behavior and the associated “herd mentality” which is why they always get overdone to the top and bottom. That my friends is why it’s so hard to be a commodities trader. So often you have to go against your pressing behavioral instinct. Have a nice day.