The Market Must Have Loved The Dismal Jobs Report Today -- January 6, 2017

The Trump rally surges. All three indices hit all-time records: Dow 30, S&P, and the NASDAQ. Broad-based. Not one sector is leading this. Every sector involved. "Hope" sectors taking the lead (according to CNBC).

The Dow 30 is less than 10 points away from 20,000.

WTI is at $54.96.

Oh, oh, oh --- now less than four points away.

Almost: January 6, 2017 -- 11: 43 a.m. Central Time -- 19,999.63 (from CNBC crawler). My data suggests that if the major oil companies jump in this rally (today) we will easily go over 20,000 but right now CVX, XOM, and COP are all marginally down. As is T (down almost 2%). ENB is down, KMI is up slightly. BRK is up marginally, essentially flat.

My hunch: if we do go through 20,000, it will occur during a commercial break.

One comment: I generally don't watch much CNBC but it was a bit exciting today. After listening off and on for about six hours, and watching various segments, this is the big takeaway for me with regard to the market today: Pocahontas will be a voice in the wilderness. She will get a lot of air time because the mainstream media has very few of their own to interview, but within the halls of Congress, she will pretty much walk alone. 

The market, Dow 30:

• new highs, 69: CNP, Deere, HAL, WMB (another big whoop)
• new lows: 8

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A Man Of Constant Sorrow Is Moving On

One recurring theme on CNBC: are investors expecting too much? Are investors expecting that Trump's "make America great again" policies will be in place by the end of his first week? Are investors going to be discouraged when Trump's policies are not put in place by February 15th? I think folks asking those questions are missing a point that has not yet been made. The bottom line for me: come January 21, 2017, I no longer have to worry about new regulations that are anti-growth. There will be no more speeches about how capitalism is bad. There will be no more "apology" tours. 

Publicly traded companies will feel more confident about making investments; publicly traded companies will feel more confident about expanding. Publicly traded companies who held off on increasing CAPEX because of the uncertainty of a Hillary presidency have a more optimistic outlook. Even if nothing changes in the tax code (and, of course, that's not accurate), under Hillary there certainly would have been more of "if it moves, tax it."

For many of us, the man of constant sorrow is moving on. Yes, #6 in the countdown:

A Man of Constant Sorrow, Soggy Bottom Boys

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Chalk And Limestone

The other day a reader sent me a link to an article over at Seeking Alpha on EOG's Austin Chalk wells. I did not post it then because I was not particularly interested in Austin Chalk. But now, today, while reading The Cell: A Visual Tour of the Building Block of Life, by Jack Challoner, c. 2015, some dots connected that caught my interest.

First, I had completely forgotten all about Austin Chalk. I do have a link to Austin Chalk at the sidebar but that's about the extent of my interest.

At the linked Seeking Alpha article, the contributor notes, comparing the Austin Chalk to the more prolific Permian, two plays in which EOG is involved:

The comparison of production decline curves yields the following insights:

• Austin Chalk wells are less prolific, yielding 630 MBoe in estimated ultimate recovery (EUR) compared to 780 MBoe in the Permian (and now up to 1.5 million boe in the Bakken's best locations)
• The crucial source of Austin Chalk's advantage is brought about by a dramatically higher oil content. It is worth noting that the company's acreage in Karnes County falls within the crude oil window of the Eagle Ford. Despite having a lower EUR, these wells have a higher oil recovery, at 465 MBoe compared to 380 MBoe for Permian wells
• The percentage of oil in the output stream starts as high as 85% in Austin Chalk with the eventual decline to about 67% at the four-year mark. In the Permian, about 76% of initial production is oil, declining to below 40% by the end of the fourth year, and as low as 35% at the five-year mark
• The higher oil content in Austin Chalk is the first hint that those wells are going to pay off sooner than an average Permian well

So, what caught my interest. Warning: at this point, this is very, very esoteric and anyone who reads further, proceeds at one's own risk. From Challoner's book on the cell.

Protists are one-celled eukaryoctyes.

Protists that live in water often develop hard cases. Examples:

• loricae: 
• basket-shaped composed of various biological materials
• used by some ciliates and flagellates
• continuously produced inside the cell and held inside tiny granles
• frustules:
• made by diatoms
• made by dissolving silicate materials
• settle at bottom of oceans and lakes
• called diatomaceous earth
• prized as an insecticide by gardeners
• nitroglycerin, highly sensitive to vibration (unstable, explosive); to transport, place in diatomaceous earth where the nitroglycerin is absorbed and made more stable = dynamite
• coccolithophores:
• protists that make coccoliths (spherical stones)
• made by plantlike flagellates
• coccoliths made of calcium carbonate
• "CHALK" 
• White Cliffs of Dover
• foraminifera:
• ameboid (animal-like) protists
• also calcium carbonate cases: these hard cases are called "tests"
• "LIMESTONE"

So, now the connecting dots.

I am way beyond my comfort zone here, but I believe the middle Bakken is dolomite limiestone. Limestone is calcium carbonate; dolomite is calcium carbonate with magnesium.

So, "chalk" in Eagle Ford, "limestone" in the Bakken. I'm going to stop there. For now.