• "One more thing." -- Lt. Columbo 

As of 3:48 PM there is $2.4 billion to sell market on close.

Happy New Year to all, especially my pals in the comments section.

Have fun tonite and drive carefully!

Thanks for reading my diary. See you back on Friday.

• Brace yourself.

Starting on Friday (Jan. 1), we will likely have a tug of war between new monies flowing into the market against a lot of tax selling (of winners, in order to avoid a 2014 tax event). Fasten your seatbelts.

• A heads-up.

Crude has rallied by $1 per barrel from the day's lows.

• Ironic.

With expectations of investors quite elevated into the New Year, it would be ironic if the S&P 500 suffered one of it's worse days on the last day of the year.

• Back to market neutral.

With the S&P futures now down 16 handles, and the Nasdaq futures down 50 handles from this morning's highs, I am reducing my ETF hedges and moving back to a market neutral position from 10% net short.

Covering some SPDR S&P 500 ETF Trust (SPY) at $206.58 and PowerShares QQQ Trust (QQQ) at $103.70.

I will start 2015 with a relatively clean slate.

• I am offering more JPMorgan (JPM) on the short side this afternoon.

• Now about 10% net short.

I am covering the portion of my SPY short (done at $208.12) in premarket trading link for a $1 gain ($207.05).

I am still about 10% net short.

• Midday musings from Sir Arthur Cashin.

Vague rumors that King Abdullah may have taken a turn for the worst added to volatility in crude pits (possible change in policy?).

Run rate is quite slow and at noon projects an NYSE final volume of 500/580 million shares.

Happy New Year!

• To all.

Be at war with your vices, at peace with your neighbors, and let every new year find you a better man. -- Benjamin Franklin

To all our subscribers, contributors. TheStreet management, Jimmy "El Capitan" Cramer, our editorial team and tech/marketing teams, I wanted to wish everyone the warmest holiday greetings and a Happy and Healthy New Year!

Life is a tapestry of our decisions and a succession of lessons learned.

• I continue to pick at Monitise (MONIF), though still small.

It will be interesting to see the action in early January after the tax selling abates.

• More vodka for the ruble.

From CNN/Money: "The Russian economy is in a tailspin, but hey, vodka is about to get cheaper!"

• Peter Boockvar parses through the economic data and investor sentiment.

Bottom line, there are clear slowing signs for the domestic economy as investors grow more bullish. In other words, the great disconnect continues.

The December Chicago PMI manufacturing index, the last of the regional surveys to get reported before Friday's national ISM, fell to 58.3 from 60.8. It's at a 5 month low, less than the estimate of 60.0 and below the 2014 average of 60.8. The m/o/m fall was led by a 5.1 pt drop in the production component and new orders fell too. Also of note, backlogs fell below 50 and inventories fell to the lowest since April. Employment rose but only reversed almost half of the November decline. Due to the decline in energy prices, prices paid fell to the lowest since April. Bottom line, the Chief Economist of the firm that released this data said "It was a disappointing end to the year with the pulse rate of our business panel slowing noticeably in December. The trend, however, remains solid and consistent with continued growth in the US economy." This figure follows m/o/m declines seen in NY, Philly (albeit off a huge print in November), Dallas and Milwaukee, little change in KC and a rise in Richmond. Also, the Markit's measure of national manufacturing (out a few weeks ago) matched a 14 month low mostly due to softness with export orders. Friday's ISM is expected to fall to 57.5 from 58.8 which would remain above the 2014 average of 55.8. The estimates for Q4 GDP growth are all over the map between 2-4% with us in the 2.5% camp which would leave full year growth of about 2.5%. In Q4, consumer spending will be fine but cap ex, housing, and exports will likely be mediocre and government defense spending will reverse after the robust Q3.

Pending home sales in November rose .8% m/o/m, a touch above the estimate of up .5% after a slight one tenth downward revision to October. The y/o/y gain was 1.7%. The NAR chief economist said contract signings have been mostly stable but "haven't broken out even as the economy picked up steam this spring." He did highlight the potential help to housing in 2015 by saying, "with rents now rising at a 7 yr high, historically low rates and moderating price growth are likely to entice more buyers to enter the market in upcoming months." He however is pushing the envelope in thinking that "falling gas prices will likely boost consumer confidence and allow prospective buyers the opportunity to save additional money for a downpayment." While I agree it will help consumer confidence, saving an extra $500 in 2015 (if gasoline prices stay where they are) will not move the needle on buying a new house where it equates to about just .25% of the median cost of a new home (around $200k). Bottom line, as I stated yesterday, the housing recovery remains in fits and starts.

Lastly on the day, the year is ending with an above 40 pt spread in the stock market sentiment between bulls and bears. Bulls rose to 56.4 from 52.5 while bears fell to 14.9 from 15.8. The spread of 41.5 is back in the "danger" area according to II, up from 36.7 last week. Bottom line, even with overly bullish sentiment, the bulls have certainly been right and will be until they're not.

• I shorted more SPY at $208.12 in premarket trading this morning.

• Let's see how they look at the end of the year.

Next week I will have some additional updates on my favorite asset class: closed-end municipal funds.

For now, we will end the year with still-wide discounts to net asset values and with attractive absolute and pre-tax equivalent yields.

• "I learned that ..."

Here is "Downtown" Josh Brown's annual column on what investors/bloggers/pundits "learned" in the past year!

Its a fun read.

• Should not move the market.

Initial jobless claims totaled 298,000, that was 8,000 more than expected and a 17,000 boost to a revised 281,000 last week. The four-week average was unchanged at 291,000 and continuing claims were down by 53,000.

Nothing yet was seen from the fallout in the energy sector as oil prices retreated, as Texas, Wyoming, North Dakota, Oklahoma and Louisiana were fine. But the lagged impact should shortly be felt. (That said, Ohio (Utica shale area) did have the second-largest increase of all the states in claims).

Bottom line and overall, the level of claims still points to a muted pace of firings and is certainly encouraging for the labor market, but it's inevitable and only a matter of time that oil/gas producing states will start to see layoffs, with the extent, of course, still uncertain.

This report should not be market moving.

• Sir Arthur Cashin's Traditonal Year-Ending Missive!

'Tis the day before New Year's

and despite what you're hopin'

The folks in the Boardroom

say "the full day we're open"

So we'll buy and we'll sell

as the tape crawls along

And though "Bubbly's" verboten

we may still sing a song

Two Thousand Fourteen

was okay, not really a wow

Till a Santa Claus rally

took us through Eighteen Thou

We lost special people

as we seem to each year

It just makes us treasure

each one that's still here

Robin Williams, so manic

snuffed out his own light

Mickey Rooney's gone also

into Dylan's Good Night

Joan Rivers departed

when a doctor slipped up

And Sid Caesar now sips

from a heavenly cup

James Garner, "Bret Maverick"

has played his last hand

Polly Bergen now sings

in an Angelic band

Eli Wallach needs no badges

he's got wings, I've a hunch

Elaine Stritch found a new place

now with cherubs she'll lunch

Hurricane Carter

has thrown his last punch

Ann B. Davis as "Alice"

no longer waits on the "Bunch"

Bacall, who could whistle

took her last curtain call

Philip Seymour Hoffman

is now just down the hall

Casey Kasem's now listing

Top 40 harp songs

Mayor Barry departed

moving on past his wrongs

Mike Nichols graduated

to Mrs. Robinson's place

Ruby Dee now also

fills heaven with grace

Ben Bradlee followed Nixon

for one final time

Maya Angelou tells St. Peter

her favorite new rhyme

Oscar De La Renta

designed his last gown

"Adam Smith" (Jerry Goodman)



he has also left town

The threat of Ebola

made everyone fear

'So Time made health workers

their Man of the Year

Kim K bared her assets

glossed up till they shone

But most folks on the net shrugged

and left the whole thing alone

Some guy near the White House

hopped up over the wall

And since the door was unlocked

he just strolled down the hall

The ice bucket challenge

made some hairdos a mess

But it raised lots of money

to help fight ALS

In their Little League Series

one kid pitched a pearl

As a young lady showed us

how to "throw like a girl"

Polar Vortex froze business

The year started out rough

But when we got defrosted

things seemed to go well enough

There were shootings, then lootings

things kept turning bizarre

Until a mad man came North

to shoot two cops in a car

We saw ISIS beheadings

and car bombs galore

Sadly, three different airliners

got half way but no more

Brad wed Angelina

and George Clooney - Amal

But some folks like Don Sterling

could not find any pal

There were midterm elections

The GOP did quite well

Will that help them to govern?

It's way too early to tell

Sony thought it terrific

and they'd have lots of fun

If they made a joke movie

in which they killed Kim Jung Un

Derek Jeter retired

one game at a time

In most states, gay marriage

is no longer a crime

The NFL fumbled

on domestic abuse

We didn't see the whole tape

was their only excuse

Rolling Stone ran a story

that they later withdrew

And more women blamed Cosby

saying the press really knew

Gwyneth Paltrow "decoupled"

Taylor Swift told streamers "No!"

In the kid's movie Frozen

Elsa sang "Let it go"

Let not this year's memories

of sadness or sleaze

Disturb you this day

just give your heart ease

Have faith that this New Year

will bring a new sign

And believe in yourself

it will all work out fine

Just lift up your spirits

and some fruit of the vine

And kiss ye a loved one

and sing Auld Lange Syne

And late in the evening

as you watch the ball fall

Wish yourself all the best

Happy New Year to All!!

• Long-term leadership helps.

From The Harvard Business Review, "The Most Innovative Companies Have Long-Term Leadership."

• Not so outlandish?

Surprise #1:

European QE Backfires:The ECB initiates a sovereign QE in January 2015, but it is modest in scale (relative to expectations) as Germany won't permit a more aggressive strategy. Markets are disappointed with the small size of the ECB's initiative and European banks choose to hold their bonds instead of selling. ECB balance sheet still can't get to 3 trillion euros and the euro actually rallies sharply. Bottom line, QE fails to work (economic growth doesn't accelerate and inflationary expectations don't lift). 

Draghi Is Exposed:Mario Draghi is exposed for what he really is: the big kid of which everyone is scared. For some time, no one wanted to fight him (or fade sovereign debt bonds, which would be contra to his policy). But, after the meek January QE, the response changes. He is now seen as the bully who never throws a punch and who always has gotten his way. But at the time of the January QE a medium-sized kid (and a market participant) teases him and Draghi warns him again to stop it. The kid keeps teasing. Draghi the bully takes a swing, it turns out he can't fight and the medium-sized kid whips his butt. From then on, the big kid is feared no more. For some time Draghi has said he will do "whatever it takes," but he never really had to do anything. When he finally gets going and has to act rather than talk, he will expose himself as only a bully and as a weak big kid. Mario Draghi gets fed up with the Germans and returns to Italy (where he was governor of the Bank of Italy between 2006-2011) and becomes the country's president.

 - Kass Diary, 15 Surprises for 2015

Late yesterday afternoon, Evercore ISI wrote that Draghi leaving the ECB and becoming Italy's next President is "not so outlandish a prospect that it can be ruled out."

This was (see above) Surprise #1 in my Surprise List for 2015!

• The rundown.

• U.S. futures are up modestly (S&P futures are +2 handles and Nasdaq futures are +3 handles higher.)
• European stocks are up fractionally.
• Nikkei is closed.
• Chinais +2.18% and ended the year on a solid note. The HSBC December manufacturing PMI moved below 50, in line with expectations. Gains were broad, with energy financials and telecoms outperforming. Financials were a standout (+3%). 
• The U.S. dollar is -0.09% and the euro is -0.07%.
• Gold is -$4 an ounce and crude is down a beaner (continuing its lengthy period of weakness). Natural gas is down another -1.7% to $3.04. Copper is -0.63%.
• The yield on the 10-year U.S. note is down by  another 1.5 basis points and is now back under 2.17%. Remember, I thought the rise in bond yields would stop at 2.25% at year end -- so far, so good. Meanwhile, EU sovereign debt yields are back to yearly lows, with losses of 4-6 basis points in yield.

Global stocks were slightly higher, though there was little news to account for it.

I have exhibited how slow volume has been in the last few days. Today should be more of the same in the U.S. The Chicago PMI will be reversed at 9:45 a.m. and U.S. pending home sales 30 minutes later. 

The formal China number hits later tonight, while Europe and the U.S. PMIs are both out Friday morning.