Dec 19, 2014
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During the first half of December the Dow Jones Industrial Average plummeted from near 18,000 to a low near 17,000. This 5% air pocket spooked investors with headlines of Russian currency chaos pushing the ruble down by over 50% since early 2014, oil prices in free fall to under $54 per barrel, and recessions already taking hold in many countries dependent upon commodity exports. Apparent selling pressure came from global leveraged trading houses, tax loss selling, and investors reducing energy weightings. Just as quickly as the slide began, oil found footing near the $54 mark and staged a mid week bounce. Janet Yellen started yellin’ “patience” regarding loose monetary posture while lowering inflation forecasts. The combination of Fedspeak with the oil bounce corresponded to a monster rally that led CNBC’s Cramer to declare: "The bulls rejoiced while the bears got caught short in a rip-your ursine face off rally that will last as long as oil stabilizes or even goes higher, before resuming its decline again.” “Rip-your ursine face off” makes it sound very painful to be a “bear.” In fact, just the thought of it may have dissuaded a few pessimistic viewers to change their perspective. Correspondingly, the volatility index, VIX, quickly dropped back below 20 signaling an all clear for institutional buyers to finish year end allocations. The stage is set for the continuation of a Santa Claus rally with the S&P climbing back over a 10% gain for 2014. Pessimists and doomsayers are likely to find lumps of coal in their stockings, a just reward for holding back their talents again in 2014. (dow 30 day)
“Santa baby, just slip a sable under the tree, for me Been an awful good girl Santa baby, so hurry down the chimney tonight Santa baby, a '54 convertible too, light blue I'll wait up for you dear Santa baby, so hurry down the chimney tonight Think of all the fun I've missed Think of all the fellas that I haven't kissed Next year I could be just as good If you'd check off my Christmas list Boo doo bee doo Santa baby, I wanna yacht and really that's Not a lot Been an angel all year Santa baby, so hurry down the chimney tonight Santa honey, one thing I really do need, the deed To a platinum mine Santa baby, so hurry down the chimney tonight Santa cutie and fill my stocking with a duplex, and checks Sign your 'X' on the line Santa cutie, and hurry down the chimney tonight Come and trim my Christmas tree With some decorations bought at Tiffany I really do believe in you Let's see if you believe in me Boo doo bee doo Santa baby, forgot to mention one little thing, a ring I don't mean on a phone Santa baby, so hurry down the chimney tonight Hurry down the chimney tonight Hurry ... tonight”
- by Eartha Kitt
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ENERGY UPDATE: Energy: Pessimism Pervades, Negative Catalysts Nearing Exhaustion