Editor's note: Combining his passions for the markets, humor and food, "What's cookin' with Kenny Polcari" is a blog published twice weekly on CNBC.com. With more than 30 years of experience on Wall Street, Polcari provides insight and analysis on the markets, as well as a recipe du jour. Buon appetito!
After Chinese and German flash PMI figures met and exceeded expectations, and as longer-term investors reassess their portfolios going into the final two months of the year, the stock market turned higher Thursday. Investors like seeing those green arrows on the screen, and I think they'll like my recipe for chicken thighs bathed in herbs and white wine, too, but more on that later.
(Read more: China unlikely to see a repeat of June cash crunch)
The bottom line is that the broader market is up 6 percent off the debt crisis lows after it became clear that the Fed isn't going away. So the market does need to catch up with itself as it considers the legitimate risks remaining.
Yet investors do not appear to be concerned. After being held hostage with the debt ceiling and government shutdown, investors are now concentrating on the macro and micro fundamentals of the economy, and they like what they see. Or is it that they have no other choice if they want to be invested and yet also want liquidity?
With such strong gains at this point in the year, many asset managers will work hard to protect those gains. Do not expect them to make any drastic decisions unless forced to. There is no reason to make any big bets either way or risk taking a hit to year-to-date performance.
Analysts will tell us that this earning season has been "not so bad." Of the 140 S&P companies that have reported to date, 74 percent have exceeded earnings forecasts (yes, lowered forecasts, but the market knows that), and it is about 50/50 on how many have missed revenue expectations. That means that 50 percent have beaten them, which is of course key for continued profit momentum. It is about accentuating the positive and eliminating the negatives.
Wednesday's action saw cyclical come under pressure. Energy stocks fell as the price of oil moves still lower; financials and basic material names were also used as a source of cash as money moved into the safety trade. Winners included home builders (as 10-year yields drop below 2.5 percent), consumer staples and big industrial names thanks to the Boeing report.
(Read more: Ford earnings beatestimates; lifts guidance)
The chatter is now heating up. What will happen in December? What will the holidays shopping season bring for retailers as they are already jockeying to attract the buyers. Remember, the holiday season accounts for 25 percent to 40 percent of retailers' annual sales, so it is key for detailing consumer health. Are they exhausted yet or will retailers offer such deep discounts that shoppers just 'could not leave it on the shelf'?
Surveys do show that retailers are expecting a rise in holiday sales. That's all good, but then what happens to margins? Will sales volumes make up for margin compression?
(Read more: Holiday wars: Target pushes online, price match)
Looking at Thursday's market, my sense is that we will test the highs again of 1,757 on the S&P and then back off again remaining in the tighter 1,740-1,757 range. Any break lower would see a test at 1,725.
And now from the kitchen of Kenny Polcari, here's his recipe of the day!
Chicken thighs bathed in herbs and white wine
This is a simple dish. One pan and that's it. No messy clean up at all.
- 8 chicken thighs, with skin on
- Kosher salt
- Black pepper
- Olive oil
- 2 medium shallots, thinly sliced
- 2 tablespoons of sherry vinegar
- ¼ cup of water
- ¾ cup of white wine (Pinot grigio works well, but do not use Chardonnay because it's too fruity)
- 1 ½ teaspoon of finely chopped fresh Marjoram, parsley, and thyme
- ¼ stick of butter
Season the chicken pieces with the kosher salt and black pepper and then set aside.
Use medium high heat to warm the oil in a large skillet. Place four thighs skin side down in the pan and cook for 5 to 8 minutes or until golden brown. Flip and cook the other side another 8 to 10 minutes. Cook until the juices run clear. Remove and set aside in a large serving platter and repeat with the remaining pieces.
Now, in the same skillet, add the sliced shallots and sauté until softened. Next, add the vinegar and let it deglaze the pan. Make sure to scrape up any of the bits that might be stuck to the bottom of the pan.
Now add in the white wine and maybe a ¼ cup of water and simmer for 5 to 7 minutes or so. It will reduce down to about 1/3 to ½ cup of liquid. Now add in the butter, and the herbs. Stir until the butter is melted. Pour this sauce over the chicken pieces and serve family style. Fresh sautéed spinach works really well with this dish. Drink the rest of the white wine you used to cook with.
—By Kenny Polcari, director of NYSE floor operations for O'Neil Securities and CNBC contributor, often appearing on "Power Lunch." The author is not compensated by CNBC for this or any other written materials found on CNBC.com.
About Kenny: Kenny has more than 30 years of experience on Wall Street. Currently director of NYSE floor operations on behalf of O'Neil Securities, he has also worked for Icap and Salomon Brothers. You can follow Kenny on Twitter
@kennypolcari and visit him at kennypolcari.com.
Disclosure: The market commentary is the opinion of the author and is based on decades of industry and market experience; however no guarantee is made or implied with respect to these opinions. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of O'Neil Securities or its affiliates.