With stocks surging strongly once again today, one of the legends in the business includes a guest commentary that warns of a very dangerous situation that is now developing.  The question is, if this dangerous situation gets out of control, what will it mean for the rest of the world?

By Art Cashin Director of Floor Operations at UBS 

December 18 (King World News) – “On this day in 1869, Wm. Semple of Ohio was granted a patent on a form of chewing gum.  Americans had long chewed a variation of an old Indian substance – – a combination of sap and paraffin.

But like many American invention, somewhere else another guy was working on the same project.  In this case the somewhere else was Staten Island. 

A guy named Santa Ana, who had a somewhat brief political and military career in Mexico (see “Alamo”), was trying to start a new career in his 70's.  And, where is a trendier, more intellectually challenging place than Staten Island.  He was hoping to produce a substitute for rubber and had brought along some chicle (itself the sap of a Mexican plant).

He showed it to a local inventor, Tom Adams, this particular sample.  But try as he could Adams couldn't make a rubber substitute.  So one day while he was hanging out at a drug store (the mall had not been invented yet), Adams heard a kid complain about the paraffin gum.  Adams went home, soaked some chicle in licorice and kneaded it into little pellets.  The druggist sold out the new sample in six hours.  Shortly, America was hooked on "Adams N.Y. Gum No. 1".

To mark the day, try not to chew out an employee.  Some can be very snappy.  And try not to laugh when someone tells you they always thought "Chicklets" was inspired by a poultry symbol.

Stocks were certainly not "for the birds" yesterday but they did manage to fly – and pretty high at that.

Signs Of Stabilizing In Oil And The Ruble Set Up Fed-Led Rally – U.S. stocks opened higher Wednesday as the freefalls in crude and the ruble seemed to abate.  It was not quite a rocket shot.  The opening pop merely erased the losses that came in Tuesday's final hour plunge.

The opening pop had a rather short shelf-life.  Fifteen minutes into trading, the rally began to sputter and prices began to slip.

Over the next hour, they gave back nearly half of the opening gains but by 10:45, the bulls began to circle the wagons.

By noon, they had regained the opening highs and more.  I sent this note to some friends:

Brent back near $62 raises hopes that bottoming process may be in play.

Stock bulls points to pullback hitting the 5% level.  In every other dip this year (except October) the buy dippers came in at 5%.

Fed day upward bias adds to hope. 

Run rate later.

Markets cruised sideways through early afternoon, awaiting the FOMC statement and later the Yellen press conference.  Shortly before 1:00, I sent this brief follow-up:

Final run rate projects to an NYSE final volume of 890/970 million shares.

(Given some frantic trading during the Yellen Q&A, the final NYSE volume swelled to 1.049 billion shares.

At 2:00, the FOMC statement hit.  A quick scan of the wording revealed little to nothing of a hawkish nature.  Stocks exploded to the upside.

Stocks then traded choppily around the highs as traders waited for Janet Yellen to step to the microphone.

When she finally did, the choppiness increased.  One of her responses led some in the blogosphere to speculate that a hike could come as soon as April.  That sent prices down to about where they were when the FOMC statement hit.

Later she said that the FOMC was well aware of global developments.  That was reassuring to the doves given recent market turmoil.  Stocks began to rally again and continued into the closing bell. 

Cocktail Napkin Charting – The S&P needs to rally through a downtrend line that sits today at around 2028/2031.  Failure to do so could threaten a downside reversal.

Another Pair Of Eyes – My friend, Peter Boockvar, over at the Lindsey Group doesn't seem too enthused with the Fed's policy.  Here's a bit of what he wrote this morning:

Markets are always so interesting in how they interpret not only data but the words of our central bankers. In the context of a very oversold market, equities responded to the “patient” word in the FOMC statement and the comment from Yellen that rates likely won’t rise at the next ‘couple’ (2) meetings. The US treasury market and the US$ grasped more on to the greater attention to the improving labor market and the look thru on current headline inflation trends. The 2 yr note yield is up 7 bps in just the past two days to just shy of the highest since 2011 at .62% and the 1 yr bill is at the highest since April 2011 and has essentially doubled in yield over the past month. And, the US$ ripped higher yesterday. In terms of figuring out where the economic goal posts are that will trigger a Fed move, I don’t think any of us know anymore and therefore the Fed has essentially taken them off the field. The US labor market has generated monthly job gains on average of 241k in 2014 vs 194k in 2013 and the unemployment rate since January ’13 has fallen from 7.9% to 5.8% and the Fed remains deathly afraid of raising rates even by 25 bps off zero. This is not prudence on their part, it is instead dangerous.

Consensus – The post-FOMC celebration looks to continue, based upon action in the futures this morning.  Oil seems to be stabilizing and the ruble has calmed a bit.  These two need to behave for the equity bulls to lure Santa.  Stick with the drill – stay wary, alert and very, very nimble.

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Eric King