Nancy Sinatra Sings - 'These Boots are Made for Walkin''

Good morning and welcome aboard flight 12/12/14......on its way to who knows where! Our aircraft is under the command of falling oil prices and increasing anxiety....... The captain has turned on the Fasten Seat Belt sign - so please take your seats and secure all algo's underneath the seat in front of you or in the overhead compartments.......You are on board one of the most advanced mkts in the world and there are numerous emergency exits - doors everywhere - multiple mkt centers that create frustration and massive fragmentation; it allows pico second trading and encourages sophisticated technology (otherwise known as predatory HFT's) to run each over as everyone 'runs for the exits'........Hold your hat - the ride is about to launch and it could prove to be a really exciting day.....

And so as you might have guessed - Global mkts weaker - disappointing Chinese data and more concern over oil prices....... European mkts - FTSE -1.5%, CAC 40 - 1.6%, DAX -1.3%, EUROSTOXX -1.3%, SPAIN -1.25% and the mother country Italy - 1.45%.......

US futures now down 13 pts teasing S&P 2011......blowing right thru what was hopefully support at the 2025 level - NOT! As noted yesterday - it feels like the mkt needs and must test the longer term 50 DMA support line at 1999.

For the last several days we have discussed how the mkt was beginning to show signs of exhaustion (others might say stress) now that the McClellan Oscillator has once again dipped into negative territory causing technicians to hit the SELL button which then causes the longer term Summation Index to turn negative. Then yesterday we had what is known as the 'Dead Cat Bounce" - or a brief recovery that sometimes sucks you in to make you think 'it's all good'..........(The term comes from the fact that 'even a dead cat will bounce if it falls from a great height') -

And then this morning you wake up to Nancy Sinatra singing "These Boots are Made for Walking.....and that's what they're gonna do..."

and it seems that there are some people that are choosing to walk......the question is - will they walk or will they run? Running would provide so much more excitement and so much more opportunity......

Yesterday was the classic tug of war......good news battling bad news.....bulls battling the bears......Investors wondering what will Janet do now? Oil breaks $60/barrel causing the bears to pound their chests.....and sing - "Hit the road Jack and don't you come back no more...." What will oil sub $60 mean to the mkts? Where is Mario? Is Putin ready to choke? What about the shale oil industry here in the US? So many questions...and so many answers... - either way - the mkt will determine the next stop.....

Yesterday we heard from Stephen Schwarzman - CEO of Blackstone Group, LP opine on the current state of the energy space. (Blackstone is the world's biggest alternative investment manager - they have some $280 bil under management and are now raising a second energy fund of $4.5 bil to complement their original $2,5 bil fund - which was producing returns in excess of 40% as of Sept. ) He said that -

"There are a lot of people who borrowed a lot of money based on higher price levels and they're going to need more capital, There are going to be restructuring to do. There's going to be a fallout. It's going to be one of the best opportunities we've had in many, many years"..... (and in fact I think he is spot on...)

So let's see if his soothing words can bring any calm to the energy mkts today.....

This morning we find out that the IEA (Int'l Energy Agency) cuts global oil demand forecast for the 4th time in 5 months.....saying that output from nations outside of OPEC will grow faster than demand essentially causing a SUPPLY problem which then causes them to say that demand will decrease because there is too much supply......sounds like a circular argument - no? Was it the chicken or the egg?

As noted - US futures are down 13 pts at 2011.....the mkt should find longer term support building right here between 1999/2010 ish.....It feels like they want to flush it.....and in fact that needs to happen to shake out the weak links.....
Eco data today includes PPI exp of -0.1%, ex food and energy of +0.1%. Univ of Mich conf comes out at 9:55 - exp of 89.5...but watch the mkts at 9:54:50......that will give you all the info you need as the front runners get the info seconds before everyone else......

In Asia mkts were mixed. China macro data disappointed again....Ind Prod came in at 7.2% vs. teh 7.5% expectation and down from the October 7.7% read. Retail sales though were stronger than expected. Japan +0.66%, Hong Kong -0.27%, China +0.42% and ASX -0.22%.

In Europe this morning mkts are all lower....commodities under pressure (OIL) and strategists/analysts re-assessing the latest news out of the ECB. The mixed China data not helping the tone.

Prime Rib - A Christmas Favorite

Now - on Christmas eve we eat the 7 fishes and on Christmas day - we enjoy the classic prime rib....Prime rib is easy to make - as long as you don't overcook it.....so make sure you have a good meat thermometer....

I am featuring this today for Jeanne from Osterville, Ma - Osterville is a beautiful community along the Cape Cod shoreline.....Jeanne is a friend and an avid Morning Thoughts reader.....and she loves the Prime Rib Recipe. Merry Christmas Jeanne ! I hope you enjoy.

For this you need:
1 - 10 lb Prime Rib, sliced garlic, S&P, and some thyme.

In a small bowl mix the garlic, olive oil, s&p and thyme.

Begin by putting the roast in the roasting pan - fatty side up. Now rub the roast - including the fatty side - with your mix. - Be sure to massage it well so that it is all seasoned. Set it aside and let it come to room temp.

Preheat your oven to 500 degrees - when ready place the roast in the oven and 'roast it' for about 15 - 20 mins.....- then reduce the temp to 325 - and cook for about another hour or hour and half.....- You will know when it is done when the internal temp reads 135 - this should produce a beautiful med rare roast.

Remove it - tent it with foil and let it rest for 15 mins before you carve it.

Serve this with sour cream mashed potatoes, sautéed peas and mushrooms and a large salad. Enjoy with a nice bottle of Brunello di Montalcino.....


Buon Appetito.