JJC:   After Apple (AAPL)... after Texas Instruments (TXN)... after SanDisk Corp. (SNDK)... and after American Express (AXP) all disappointed last night... I think everybody was expecting the market to get crushed today...

People were crying... They were crying in their InBev, after staring at a slew of atrocious earnings through the lens of a grizzly market, nearly everyone thought there would be some serious bloodletting today...

And that didn't happen... The sky didn't fall... Stocks are up... The market is fine...

Those who took council of their fears, will be better off being camp counselors... No offense by it... my daughter is a terrific one... And nobody knows why chicken little blew it again...

Nobody, except por moi... Maybe the market will sue Henny Penny, the way bank analyst, Dick Bove, got sued by that bank that's drowning in the Atlantic... excuse me, Bank Atlantic... 

Now, I may not be able to tie my shoes, or tie my tie without help... I may tend to forget where I live, pulling into the wrong driveway sometimes... or just miss two old ladies backing out as I did last week because I was focusing on natural gas... and I might be the kind of guy who breaks the smoke detector in half... Last night I was trying to replace the battery, causing the fire department to come to my house at 10:30... I don't know my gluteus maximus from my elbow... And I am totally and completely confused, if not baffled, by Shinola's relationship to excrement... But by God, I know stocks...

And I know why this market went up... You see, I'm completely insane and that let's me ignore the bearish story created by earnings, which frankly was a tale told by an idiot full of sound and fury signifying nothing and proving definitively only, that I took and passed that falter course in college...

That's right, Sandisk doesn't matter... Apple didn't matter... Steve Jobs' health didn't matter... Texas Instruments doesn't matter... American Express didn't matter... I think this market was up because of simple arithmetic... You didn't notice because you were too focused on earnings and fears, and yes, the desire, the human desire to panic... But I think the thing that is controlling this market other than housing and financials, what's been controlling it all year, in fact... is oil and gas... They have come down, and down hard... Oil to $128 a barrel... I think it's going under $120, perhaps to $110... And natural gas, which was at $13, ticked down to $10 and change at one point hitting $9... Now, oil and gas have hurt the airlines, the chemical companies, the industrials, the autos, you name it...

And, it also crushed the consumer products companies like Kimberly-Clark Corp. (KMB) and Colgate-Palmolive Co. (CL), that spent so much money on plastics that are made of oil... Don't forget that Depends is made with oil... And this 63-year-old is well aware of the polys that make up these and diapers... Polly want a diaper... In short, right now, oil is all that matters...

When I was a sales person on the road, knocking on doors to open up accounts, I used to call in from a pay phone, no less, and ask about a stock or two to get a feel for the day... Now, I would just ask about oil, oil is the key to this market, and I would know exactly what's happening in a flash... Understanding the rest, I say, is as easy as pie, and much easier than pi... Couldn't resist...

The last time oil was at $126 the S&P 500 was at $1403, and we're using the S&P, not the DOW, because it is much more representative of the whole market, 500 stocks... The last time natural gas was at $9 and change, the S&P was at $1322, just do the division... The last time oil was this cheap, the S&P 500 was 9.8% higher than it is right now... The last time natural gas was this cheap, the S&P 500 was 3.5% higher than it is now... Take the average of the two, and the S&P 500 is 6.7% too low... Then there's the question of the trajectory... When oil was headed was it $126, headed for $148, just under the $150 suing that I called, that was a much more bearish situation than the one where it is now, where oil has fallen from $148 to $128... Natural gas going from $10 to $13, bad... Natural gas going from $13 to $10, beautiful... Vicious cycle up, now, virtuous circle down... In my view that's the simple case for why stocks, all of them, except for the oil and gas names, which only make up 13% of the S&P500 should go higher... And it's a powerful one...

Let's throw in the fact that the systemic risk has been pretty much taken out of banking system, courtesy of the treasuries' Fannie Mae (FNM) and Freddie Mac (FRE) protection, and because we now have fortress banks, all of which were down momentarily and then soared today as the charge offs the banks have taken look to be greater than the decline in house prices... And I think you have the makings, yep, the makings of a pretty darn good decent bull run from here... Here we get two camps at the Wall Street fashion show... There's the group of investors who take a bottoms up approach, looking at the earnings of particular companies... They see that oil have come down and know that the price you pay at the pump is coming down too... When oil was at $148, gas was at $4.11, with oil at $128, I'm predicting gas to be at $3.50... And $3.50 in a heartbeat... You just saved $.50 a gallon...

You're going to feel better... That should mean that the retailers and the restaurants, both groups that had also been hurt by house price depreciation, would become less of a problem... Restaurants are back in style, because they do better as gas prices go lower, so do department stores... It also makes you more likely to pay off you home equity loan, which is the last big black hole in finance, and the one that we're seeing plugged by some of the big banks... Then there's the second camp... This is the camp that takes the big picture macro approach and believes lower oil prices signal a slowdown...

They're likely selling the commodity names, we saw that in force today and buying defensive names... I mean, that's why we like the CR Bard Inc. (BCR), up 2.5% today... Becton Dickinson & Co. (BDX) up 1.8%... That's why every biotech keeps soaring and will continue to do so... Kimberly-Clark Corp. (KMB) had a terrible quarter, is up today, because its costs are practically all oil... It's the kind of defensive stock the big money guys generally like during a slow down... Colgate-Palmolive Co. (CL), Clorox Co. (CLX), I could go on and on...

The math, no, no... It's simpler than that... The arithmetic of oil and gas and the decline in oil and gas, it's irrefutable... We are 6.5% too low as of this evening, and it says the market is heading that... It's heading up 6.5%... If you can count, you know that the fundamental forces in control of the performance of numerous sectors, oil and gas prices are pushing stocks up, not down... The numbers tell the story... They may not be in the headlines, like Apple (AAPL)'s disappointing guidance and worries about Steve Jobs' health, but I believe they do drive the market... And right now, they're driving it higher...