Well, today was a big surprise. A major rally on fairly high volume. The alert recommendation to sell SKF was right on time yesterday, it lost 12% today as the financials soared on news of Merrill Lynch raising 8.5 billion in capital. Oil continued to make new 3-month lows, as this correction is well underway and perhaps getting a little oversold. Our oil shorts continue to do quite well via the HOD in toronto. Oil stocks on the other hand are dramatically oversold, and ripe for a bounce. Unfortunately the move in oil was bad news for gold (they have a high correlation), and especially Yamana which dropped over 4% today---well nobody's perfect! I would still hold on, although you may reduce your position by half if it falls to 12. STJ rallied almost 2% on strong volume, although it remains in a trading range, ready to break out to new highs if the market allows. Continue holding, I am about break even on this position. For those of you that shorted the Swiss Franc via FXF, you were well rewarded as it has since dropped 3% in the last few days-- a lot for a currency, and it continues to make new lows. I personally own the put options to get more leverage (20 to 1). I expect it will continue dropping and is a good hedge against further downside in gold, as it is a gold backed currency. The central banks continue to intervene on behalf of the dollar, i think this will end towards the fall. The coordinated mass intervention on all fronts is significant---the president of Iran even publicly stated that oil was overvalued and was not supported by fundamentals to the US media. This is very unusual as the Iranian president is very anti-US and has made several statements this year alone about $200 a barrel oil. It is a complete retraction - i feel he is being pressured, or threatened or both. The sheer number of important super high level officials that have travelled to the Middle East since March is mind-boggling. There are definitely some closed door negotiations going on.

Expect the S&P to rally tommorow, and then eventually we will see things flatten out. Beyond that point we will have to wait and see. But i expect financials to consolidate for a little while. I am eyeing the XLE (the energy ETF) and XTO energy---both of these are badly oversold. Tommorow could provide the first of many entry points if things get weaker.I plan to scale into this trade--ie continue averaging down. This again like SKF is a 90% shot in my opinion.