7/15T11:36 Non-sequitors

Thoughts during a volatile day:

Oil drops 6+% in 10 min.? Market not responding in a meaningful way. Tried to rally to break even but now down 1% again.

Fed speech much more negative on economy and scared of inflation. Is the markets muted response to the sell off in oil due to the dawning realization that the economy is headed into a recession of some magnitude?

Is oil down because of the changing perception that the economies around the world will slow down in the 2nd half so demand will be effected?

The US$ is not rallying. A $ rally has been the cause of oil sell offs in the past.

I want to use the weak rally off of the 2% decline in the first hour to build some short positions in the small regional banks. SBIB, PRSP, WABC. I also want a 1/2 position short of ING. The stock is already down a lot but their fundamental focus on high yielding money markets should come home to roost in this market. Also, shorting beat up stocks has worked, e.g. LEH, BSC...

GLD, SLV: If we get a 60 min. sell signal on these ideas we need to book our nice gains. The idea was always to use GLD and SLV as short term trading tools to augment CEF.

Steel stocks: Today's paper highlights the belief in the market place that steel stocks are no longer cyclical. Since the dawn of time steel has been effected by the economy and recessions, but now the paper suggests that there is no long a cyclical nature to the business. Doesn't this article have to mark the top in the space? Didn't we read those type of stories on the home building sector right at the top? THIS TIME IS DIFFERENT! Those statements tend to set up great trading opportunities.