Happy half-day, folks. Yes, today was a rare half-day for the market, which closed early to let traders get an early start on tomorrow's Christmas break. Any day the market opens even just for a few minutes, though, there's something worth talking about. Today was no exception, with oil plunging on the heels of a surge of stockpiled crude oil. We'll get to the heart - and truth - of the matter in a moment. First, there's a small piece of business we need to take care of. Yes, the market is closed tomorrow in observance of Christmas, which (statistically speaking) most of you will celebrate. Whether it's Christmas, Hanukah, Kwanzaa, the Winter Solstice, or anything else you celebrate this time of year, we hope you have a blessed and enjoyable holiday. Have fun, stay safe, and we'll be back to work for you on Friday when trading resumes. Yes, the Oil Supply Really Did "Surge", But.... As those of you who've been reading the SmallCap Network newsletter for at least a few weeks will likely know by now, it really ruffles my feathers when the media or one of its favorite market pundits makes a big claim without backing it up with facts or providing some context for the observation. The ones that really chap my @#$% tend to focus on "gold's fundamentals" [which are an enormous, ever-morphing collection of factors nobody can effectively collate], though the problem of generalized assumptions can pop up anywhere at any time for any reason. Case in point: Oil. While most of the market wizards who follow oil have been broadly explaining oil prices are falling because crude oil stocks (barrels, not equities) are rising rapidly, not one of them ever mentioned how even with the recent rise in crude stockpiles, we're still miles away from the peak stock levels hit in May. And, none of them mentioned how stock levels were almost at multi-year low levels just in October. It's true! While U.S. output of crude oil has risen and continues to rise, the idea of massive stock piles of crude oil are largely a myth. How do I know? Because the Energy Information Administration publishes oil stock levels every week - the same data frequently used to explain why crude oil imploded - for you and I to study, track, and plot. In fact, we've got a chart of it for you below. Take a look. To be fair, stock levels really did surge last week. The EIA reported the U.S. is now sitting on 387.209 million barrels (excluding the strategic reserve) versus 379.9 million barrels as of two weeks ago. And, that 387.2 million barrels really is a multi-month record. As the chart plainly shows, however, oil stockpiles are nowhere near as "through the roof" as we've all been led to believe by the headlines. It all begs the question... what the heck has really caused the supply glut panic that cut oil prices in half since June? The answer is, mostly the hype the media loves to circulate. Just so there's no confusion, there is a supply/demand issue in play. The United States has never had as much production capacity as it has now, and that is disrupting the global oil market. The steep decline in the amount of crude the U.S. imports verifies this, and U.S. consumption of oil has continued to grow since 2006, even though our oil imports peaked then. Here's the chart of our dwindling imports. And yes, there's no doubt the U.S. is making more of the oil it's using now. Monthly home-grown production is up nearly 70% since 2008's glut. Still, from a raw supply and demand point of view, crude oil's plunge from $107 per barrel in June to $55 now is based less on trailing history and more on assumptions regarding where these trends could take oil. It's inherently a risky problem, though, because traders and even professional investors are more than capable of jumping to extreme - and errant - conclusions. That's my indirect way of telling you I still think oil is at or near a major bottom... the supply isn't growing out of control. Heck, even with last week's big jump, we're still not at supply levels seen just a few months ago. Moreover, the U.S. is close to hitting maximum production capacity, not so much in terms of tapping all accessible oil fields, but in terms of being able to process and use it at a price where oil companies actually make enough money to bother continuing to drill for it. In fact.... My guess is the current supply trend will soon abate just like the last several have, and will prod crude prices higher again. I still have no real idea why this particular supply glut (from April) was the one that kick-started crude's selloff, but I'm going to assume it's because American investors only recently realized just how big of an impact fracking has had on our oil production capacity, and these investors simply felt some sort of action was needed. That action was a selloff in oil. The fog is starting to lift on the other side of reality, however, and as it turns out, we're not completely swimming in oil after all. The pace of growth in U.S. output is apt to slow sooner than most realize too, and by more than most investors seem to realize. Actually, we may well already be there. Traders have only started to correct their mistake by not allowing crude oil to slip below $54.00. But, I've got a feeling all we need is a good nudge above $60 to get this pendulum swinging back in the other direction again. Look for it, and fairly soon. It's Still Not Too Late to Go Shopping Thanks for indulging my oil rant. It just bugs me when I know investors don't have all the relevant facts or perspective, and since the media doesn't seem interested in doing so, we're glad to show you the whole story. We'll flesh out some more oil details as the need arises. As for the stock market, let's not even bother with a detailed look today. Volume and net movement was especially light (even by half-day standards), and there's no need to make something out of nothing. Everything we said on Monday or Tuesday still applies - stocks are at a major fork in the road. Instead, let me give you a last-minute gift idea for the person you errantly left off your shopping list... a subscription to the Elite Opportunity service. Everyone would like a way of getting more out of the market, and the EO is the best way I've ever seen of doing so. There's a variety of subscription terms too, fitting any budget. Just go here to see them all, or cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/ And again, we wish you and your families the very best this holiday season.