Yesterday presented the kind of session that allowed for an assessment of investor sentiment, which would have been the kind of Black Swan capable of derailing the entire market. There is no doubt that Saudi Arabia losing half its oil production to drone attacks qualifies as a Black Swan event. While crude oil surged, there wasn’t a sense of panic.

S&P 500 Index		-0.31%
Communication Services (XLC)		-0.37%
Consumer Discretionary (XLY)		-1.28%
Consumer Staples (XLP)		-0.97%
Energy (XLE)	+3.36%
Financials (XLF)		-0.35%
Health Care (XLV)		-0.22%
Industrials (XLI)		-0.09%
Materials (XLB)		-1.64%
Real Estate (XLRE)	+1.04%
Technology (XLK)		-0.25%
Utilities (XLU)	+0.08%

Not only was there ‘not’ panic, but the market breadth was bullish with lots of individual stocks staging strong intraday reversals, especially among newly traded Technology names.

Market Breadth	NYSE	NASDAQ
Advancers	1,573	1,617
Decliners	1,380	1,503
New Highs	56	57
New Lows	6	22
Up Volume	2.29 billion	929 million
Down Volume	1.33 billion	637 million

Resolve…Where’s the Punch?

The market began exhibiting impressive resolve in late August after a couple of weeks with Dow losses of 500 and 600 points (that index and its other large equity rivals) held when they had to; when the spark came, the market was ready to bound higher.  

That resolve remains. Once again, investors are wondering where the spark is.

What I’m watching today:

I want to see if crude continues to rally, and I wonder at what point it triggers the White House to dip into the Strategic Reserve. It’s just a hunch, but with most oil analysts suggesting crude oil increases at least another $0.20 to $0.25, it would take it toward that magic threshold of $3.00. 

Three reasons the White House needs to curb the price of crude:

• Impact on economy and elections
• Oil stocks have a better track record of predicting recessions
• Higher crude could mitigate Fed concerns about deflation

Interestingly, it seems as if President Trump may be content not to rush into military retaliation on behalf of Saudi Arabia. The fact of the matter is Saudi Arabia must be embarrassed, and it’s time for them to step up to the plate and to do more for themselves. 

By the way, one of the first cancellations of Boeing 737 orders came from a Saudi airline when Flyadeal changed its mind on an order of 30.

Buyers Looking for Action

Today, I’m watching the recent initial public offerings (IPOs) that reversed yesterday, such as CrowdStrike (CRWD), Pinterest (PINS), and others. Software stocks were solid as well. Just like that, many of these “hot” IPOs may have gone from overbought to oversold. For now, I would only be a trader of such names rather than an investor.

With the Federal Open Market Committee (FOMC) gathering and interest decision tomorrow, it would be impressive to see if buyers force the issue. On that note, the question-and-answer period is going to be a real nail-biter.

Approach

Communication Services	Consumer Discretionary	Consumer Staples
1	2	1
Energy	Financials	Healthcare
1	1	2
Industrial	Materials	Real Estate
3	2	1
Technology	Utilities	Cash
3	0	3

Today’s Session

The major indices look to open in negative territory, continuing the slide from yesterday.  Oil is higher again today.

On the economic front, Industrial production for August increased 0.6% after a 0.1% decline in July.  Manufacturing production rose 0.5%, while factory output gained 0.2% in each o the fast four months.  Capacity utilization gained 0.4%  to 77.9% , which is 1.9% below its long-run (1972–2018) average.

Comments

It's complex because Iran will use Hezbollah to attack Israel. K think a limited strike with cruise missiles on their refineries sends a message and if Israel is dragged in we should give whatever support they neef Scott Havsy on 9/17/2019 9:26:41 AM

It's time that the rest of the world started defending itself. I'm tired of being the world's policeman and conscience and either being protested or criticized for it. We can support without executing the action. If the Saudis feel threatened, they should do something about it. Scott on 9/17/2019 9:44:02 AM

For now just support the Saudi's but remain on high alert and prepared to do more. Doug Eatough on 9/17/2019 9:52:08 AM

The proxy war between US and Iran/(Russia) has been ongoing for some time in Yemen and suggest we continue on that path until Iran confronts our interests directly (e.g. Israel). This also "forces" the Saudis (and other Arab nations) to respond and defend hostile aggression in their own backyards. Thank God that President Trump has led the way towards our energy independence!! The markets show that. Don Nadeau on 9/17/2019 9:52:14 AM

Powell has his cover for a half point rate cut but dare not do it as he is such an incrementalist and doesn't grasp what really counts. For this reason his decisions have and will continue to fall short. Just sayin'... hashtag/zeroconfidenceinthefed Ray Weldon on 9/17/2019 9:53:23 AM

Powell has been a disaster and beyond actual rate decisions his communication of policy and intent have hurt the market big time. Not sure if he gets over Trump tweets and the mention of not getting punked and focuses on the economy and changing dynamics that have evolved since that fateful trip to Jekyll Island. CP Charles Payne on 9/17/2019 12:11:25 PM

Saudi Arabia, as well as any of our other friends and allies, should do all the initial heavy lifting in defending themselves. Our initial involvement should always be support with intel, weapons, equipment, etc.. We can and should get involved more as the conditions evolve. If a friend or ally is dealt an initial or subsequent devastating blow, that will or could assure defeat, then we need to step to the front. Mike Kiernan on 9/17/2019 10:01:38 AM

I think we should shut our borders to everyone and take care of ourselves and the hell with the rest of the world. patrick colatruglio on 9/17/2019 10:07:02 AM

It's a great big world and we have been integrated from the beginning (I once saw the census of New Amsterdam people from all over the world) and its worked for the country, However, we must control our borders and keep our identify, values an American ethos. CP Charles Payne on 9/17/2019 10:14:13 AM

All I know is that we sell them military gear i.e. planes/missiles and more, we hide the identity of those that help the terrorists of 911, to the debterment of the victims. Let's stand behind them with intelligence if needed, but they need to do their own dirty work finally(out on a battlefield). Randall Reid on 9/17/2019 10:09:09 AM

I think everyone agrees its time to get our allies to stand up and do the dirty work. Thanks Randall Charles Payne on 9/17/2019 10:11:52 AM

No I think not, the leadership in Iran, though a bunch of 8th century cutthroats didn’ attack US assets. The Saudis have ample US hardware to defend themselves. Haven’t we lost enough American lives and treasure in that worthless piece of sand. Every time I read we lost another service member in that region my blood boils, let them kill each other. Killing there is a Cottage industry. Robert Gunyan on 9/17/2019 10:13:15 AM

That's the question President Trump is surely pondering at this very moment. Have we lost enough American lives and treasure? CP Charles Payne on 9/17/2019 11:35:38 AM

Saudi Arabia should do all kinetic action. US provide intel and shipping protection in Arabian Gulf. Dennis Miller on 9/17/2019 10:14:13 AM

No, this is a problem for the Saudis, they need to have a Iron dome in stalled. ted h hughes on 9/17/2019 10:14:55 AM

We should support Saudi response. John McNamara on 9/17/2019 10:20:57 AM

I think we have their back but should we put boots on the ground? CP Charles Payne on 9/17/2019 11:33:46 AM

With todays technology, no amount of money or intelligence can detect these new unmanned aircraft. An eye for an eye. I would blow smoke back on Iran and let them know they are out of line. Its like a belligerent kid in a candy store. Give him a whooping or two and he will shape up. Was interesting to hear Iran say that the people responsible for the attack had a right to do it... seems a bit fishy. Blake Fortune on 9/17/2019 10:36:31 AM

A whooping or two got my mind right growing up. CP Charles Payne on 9/17/2019 11:16:55 AM

It’s time for the world to fight there own battles, America has lost too many soldiers and too much treasure. Support them no direct involvement. Mike Burgio on 9/17/2019 10:39:09 AM

Yes we should provide support for sure but no troops. I'm with you on this. CP Charles Payne on 9/17/2019 11:18:49 AM

No we shouldn't drop bombs. We were not hit, but we do have a responsibility to the world to protect oil production and delivery on the seas. I would be for a good support role (sell them some more f-35s!), but Saudi was hit and it is they who should retaliate, tit for tat. Leelee on 9/17/2019 11:09:15 AM

Thanks Leelee I'm worried about being the world's policeman and losing American lives for oil destined for China. I get we have to deter further provocation as Iran is obviously desperate at this point but it has to be smart and clinical and the heavy duty stuff should fall on the shoulders of our ally Saudi Arabia. Charles Payne on 9/17/2019 11:12:01 AM

Support Saudi Arabia in retaliation by all means necessary. This no doubt is an act of war. Iran has to be taken down a few pegs immediately. US must engage in cyber attacks directly against all their military facilities. Martin A Mooney on 9/17/2019 11:18:06 AM

I think we are engaging in cyber attacks and wonder why that Iranian missile blew up on the launch pad a couple weeks ago (wink-wink). Charles Payne on 9/17/2019 11:20:55 AM

I think we have spent enormous sums fighting other peoples' battles. Had we invested the Iraq war expense in energy production/research we would have achieved the same goal as securing the Middle East for oil reserves. I am in favor of enabling the Saudis to protect themselves. I sure wouldn't send my son to fight that war though. Tom Gruenwald on 9/17/2019 11:58:49 AM

Don't put our military in danger over this. We've sacrificed too many of our own men and women for other nations' conflicts. Patricia Flynn on 9/17/2019 12:06:43 PM

Amen...thanks Patricia Charles Payne on 9/17/2019 12:07:59 PM

I agree fully with the rest; Saudi Arabia needs to be the ones to respond militarily. It has the military and financial means to take on the Muslim bullies. If we stay behind the scenes, it lessens the chance that our idiot press will report it falsely as a religious war or as US politics. (Of course, facts never get in their way any more, so who knows how they will spin it). What I do not understand is why you made the comment about a Saudi company cancelling Boeing orders. That really is not related to the issue of Iranian warmongering. The truth is that grossly incompetent management at Boeing screwed up badly, and the orders should have been cancelled. If you want to relate the Boeing issue with current affairs, the question should be why nobody from Boeing is headed to prison for hundreds of deaths while parents who tried to improve the lot of their children are facing the possibility of up to 40 years. Our idiot press will still be reporting that latter political story months after they have dropped any interest in how many deaths either Boeing or Iran is responsible for. Bob G on 9/17/2019 12:20:48 PM

Great points on Boeing as I think they took the 737 too cavalier (I said this after the first crash) and there should be more accountability but make no mistake there is no better corporate culture at Airbus and most customers are fine tweaking orders. They need to be doing more business with America not less. CP Charles Payne on 9/17/2019 12:47:16 PM

No bombs. Allow Saudi , with our supervision.o do something for themselves Morris Pasculli on 9/17/2019 12:51:36 PM

No more direct involvement in Middle East. Let them do their own work. Kathryn Napier on 9/17/2019 1:21:23 PM

DROP THE BIG BOMB AND CLAIM THE SAUDIS DID IT OR BETTER YET OBLITERATE THEIR OIL FIELDS E on 9/17/2019 1:31:57 PM

I would support Saudi Arabia with whatever they need except boots on the ground and let them defend themselves. Joseph Del Re on 9/17/2019 1:42:32 PM

Operative phrase: "defend themselves." Right on. CP Charles Payne on 9/17/2019 1:44:54 PM

We should make sure we know all the facts and participants in this attach before make a decision as to what course to take. Once do, I am OK with what the Presidents and Military deem appropriate. Jim Gill on 9/17/2019 2:58:10 PM

Send the Saudi's 10 Nukes and let them solve the problem. Jacob on 9/17/2019 6:40:31 PM

Let Saudi Arabia do the heavy lifting. We need to get our boys the hell out of the middle east and let the Arab tribes kill one another. When they are ready to set up tribal based countries and stop the killing we should help. James Vane on 9/20/2019 3:09:15 PM

At 68 years of age, I have been a student of news and current events since age 10. I recognize many of the faces on the news today are the same individuals in iconic photos of those who barbarously held Americans for 444 days...releasing them only upon Ronald Regans inauguration. In the ensuing decades they have honed their apatite for blood and chaos in the name of Allah. I would not "drop a few bombs". I would fix the matter once and for all. I would, in a joint session to the inept US Congress, detail the hell that regime has dispensed in the world for the last 40 years, display the poster size photos of Iran's Dirty Dozen, and ask for a declaration of war, not on the Iranian people, but on it's insidious rulers. By what ever means necessary, it time to do the right thing. We've screwed around with this bunch way too long. Mark E. Marriott on 9/25/2019 2:19:28 AM

Be ware of entanglements with 1000 year wars. William Freeman Lt/Col USAF Ret on 10/2/2019 9:40:53 AM

I think a combination of both should work. christopher voccola on 10/11/2019 3:38:48 PM

I think a few missles from the U.S. or Saudia Arabia would send a definite message to the Iranians, unfortuneatly is would send oil prices on an eleavor...which Iran and Russia would appreciate. Fred Clauhs on 10/13/2019 5:12:12 PM

Not that should be done by Saudi Arabia. I believe the tension in the middle east will be very different going forward because of the removal of our troops from Syria and hopefully elsewhere. Americans should not be dying for any reason in the middle east and should not be bombing anybody in that part of the world and elsewhere as long as we have allies in the region who are capable of doing their own dirty work. As a result, I believe our enemies will be less embolden to hit the battle fields because killing Americans in the middle east has been a badge of honor and has been the key motivating factor in recruiting. Kids that have been groomed to adulthood to hate and kill Americans will be disillusioned. A new world order is upon us! Lew Harris on 10/14/2019 8:28:44 AM

yes drop bombs turn Iran in to glass George Dorrmann on 10/14/2019 10:17:57 AM

Only as a last resort war is hell. If we do attack then a complete job should be done. A attack an exit strategy needs to be in place Don on 10/15/2019 2:07:29 PM

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