Good morning. WOW! What a good day! How good was it? It was so good the stock market went MAD! MAD is when the Dow logs a major accumulation day which is defined as a session when the up volume on the NYSE is at least 9 times more than the down volume. Yesterday was so MAD that the Dow recorded its largest one day gain in more than a year closing up 288 points, 1.7%, at 17,357. The S&P 500 added 40, 2.04%, to 2,013 and the Nasdaq jumped 96, 2.1%, to 4,644. The last time we had a MAD was October of 2013 when up volume crushed down volume 17 to 1.

The impetus of the move was the FOMC’s post meeting communique. And I was both right and wrong about what it would say. I was right in that the Fed did indeed the words “considerable time” with reference to how long interest rates would remain near zero. In place of those words the Fed said they would be “patient in beginning to normalize the stance of monetary policy.” [my emphasis], i.e. when it will hike interest rates. Where I was wrong was thinking the Fed would comment on events abroad, i.e. Russia, but they did not. So why the big jump in equities with the Fed replacing “considerable time” with “patience”? I think Mr. Burt White, chief investment officer for LPL Financial put it best, “The Fed is going to be our friend for a very long time.”

Janet Yellen, Fed Chairperson, added to the positive mood sounding upbeat about the economy during her press conference noting that although inflation is running below the Fed’s 2% target rate she expects to see normalization in the future commenting that the recent slump in oil prices which has pushed inflation lower may possibly be “transitory.” By the way, energy stocks led yesterday’s gains with that sector jumping 4.2% although it still is doing extremely poorly for the year being down 13%.

U.S. markets pulled overseas markets higher overnight and the euphoria continues this morning with the bulls getting longer and the shorts continuing to scramble to cover with the Dow screaming higher currently up 234 points which is the high of the day so far. As I’ve been saying all week, let’s see where it closes.

If you think equity prices had a wild ride you should have watched oil. WTI ended the day up only 54¢ at $56.47 but the volatility was staggering! Equities price action yesterday was a ride in kiddie land with oil’s being the colossus roller coaster! WTI traded in a $4.77 price range which equates to 8.4% of the closing price! Folks, that’s the equivalent of a 1,458 point trading range for the Dow! Maalox sales spiked yesterday! Now remember there are a ton of shorts in this market with oil prices hitting 5 year lows this week and I guarantee you they all did not get out yesterday. For the record, Brent closed $1.17 higher at $61.18.

WTI is 19¢ higher this morning being carried marginally higher by stronger equities as well as a comment from Saudi Arabia’s Oil Minister Ali al-Naimi stating the recent slide in global oil prices was temporary and that as the global economy improves so will demand for crude. Well that demand ain’t coming from Russia anytime soon. Although the ruble continues to recover from its bloodbath earlier this week things are really bad in Russia. How bad? Well as of yesterday Google’s market cap is now larger than the entire Russian stock market! Regarding oil though, the fundamentals of ample supply and flat to decreasing demand still exist and it’s going to take about 6 months for them to come into balance. I still think we could see prints in the $40’s before this down move is over.

Courtesy of MDA Information Systems LLC

Natural gas rallied 8.3¢ yesterday closing at $3.702. It’s starting to sink in that colder weather is indeed coming at the end of this month. The 11-15 day forecast get colder each day with some much below temperatures now encompassing the major gas consuming region of the Midwest. Additionally, the private forecasting service we, and importantly the natural gas trading community, use yesterday released its January and February forecast sticking by its belief those two months will on average experience below normal temperatures. Today’s colder forecast is pushing natty up 3.5¢ this morning.

It’s Thursday and that means EIA natural gas storage report day. The market is expecting a withdrawal of 55 Bcf which is anemic compared to the whopping 256 Bcf withdrawal this time last year and the 5 year average of 157 Bcf.

This will be the last Morning Energy Blog until Monday December 29th. The author is taking some time off to spend with his two teenage daughters. I hope you as well get to spend some time with your loved ones over this holiday season. Food for thought, the next time you get angry or frustrated and are ready to spit out a four letter word try one of these: help, give care, love.