Good morning. You know what today is? It’s the day you poor souls in states where there were contested congressional or gubernatorial races stop getting barraged with caustic television ads and political survey calls blowing up your telephone during dinner! Three cheers! Last night’s midterm elections were more exciting than the action in yesterday’s equities market for it was the second day in a row stocks chopped around on either side of the previous day’s close. The Dow was the only major index of the three that closed higher and it was by a scant 17 points at 17,384. The S&P 500 fell 6 to 2,021 and the Nasdaq was the laggard losing 15 to 4,624. Weighing on equities yesterday both here and in Europe was the report from the European Commission stating it was cutting its forecast for GDP in the 18 country eurozone region to 0.8% for 2014 from 1.2% and with another year, at least, to reach even a modest level of growth. Speaking of Europe, Mr. Draghi and the ECB will be meeting tomorrow and the big question is whether they will move toward more quantitative easing. The GAF’s (Germany, Austria, Finland) oppose it and the GIF’s (Greece, Italy, France) are for it. You don’t want Mr. Draghi’s job. He is getting bashed and damned from both sides. No matter what he does he will be the object of derision.

This morning Asian equities closed mixed but that’s not where the focus is this morning (although the Nikkei continues to soar as a result of the Bank of Japan’s QE announcement last week). This morning it’s all about European and U.S. equities which are all trading in the green with the former trading hugely higher between 1.15% and 1.47%. The economic data was mixed on the Continent but some positive, and surprising, earnings in the retail sector is boosting stocks there. Closer to home Dow futures are up 50 points and the coattails of Europe but down from when I came in when it was up 91. There’s no doubt in my mind investors are viewing the mid-term elections bullishly. Here’s a tidbit for you. According to Barclays, history shows a bullish bias in stocks after midterm elections. Since 1928, the S&P 500 has posted a median return of 7 percent in the 90 days after a midterm, with returns positive 86 percent of the time.

WTI traded at a three year low yesterday and Brent a four year low. WTI closed down $1.59 at $77.19, 2%, and was down as much as 3.7% when trading on its lows. Brent fell more than 3% down $1.96 settling at $82.82. It’s the same story, lower global demand and flat to increasing supply, and until that changes prices are going to keep going down to the point where it forces E&P companies to cut capital budgets. That or there’s some geopolitical event that’s disruptive of the oil markets. It’s still surprising to me that earlier this week the Saudi’s raised their price to Asia and Europe and reduced it for customers (refineries) in the U.S. Clearly, Saudi Arabia is threatened by U.S. oil production and they are working to break the backs of the leveraged U.S. shale oil producers. Even the bullish API data released last evening isn’t really helping WTI that much with it being up 32¢ which is chatter after the price collapse of the past 5 weeks. Here’s some numbers for you. A week ago the average Brent and WTI front month year spread (Dec ’14 vs. Dec ’15) was $1.67 contango. Now it is $3.00. With each passing day oil is becoming more and more aggressive in bidding for storage.

Courtesy of MDA Information Systems LLC

Natural gas continues to soar higher closing up 8.3¢ at $4.129. Natty prices have rocketed up 75¢ in less than 2 weeks. Folks, that’s a 22% increase! This is a perfect example of what I’ve told my clients privately which I’ll now tell you publically. You have to begin the supply agreement renewal process at least six months prior to the expiration because if you start the process when you see the opportunity I guarantee you you’ll miss it! Today’s weather forecast continues to show cold weather in the 6-15 day time frame with much below temperatures in the 6-10 day time frame. The technicals are lining up with the fundamentals and the bulls are firmly in control and natty is up 4.5¢ this morning. As long as the jet stream remains in this “buckled” pattern natty ain’t coming down.

More bad news for you bears. This week FERC gave NET Mexico Pipeline Partners permission to begin service on its 2.1 Bcf/d pipeline form the Agua Dulce natural gas hub in south Texas to Pemex’s Los Ramones pipeline located in Rio Grande, Texas. Folks, 2.1 Bcf/d day is a huge amount of gas. Now that’s the maximum capacity but the point here is this is more demand. And there’s more export capacity coming in the next 5 years. Have a good day.