Important Developments

I am the biggest idiot ever...... After SLW rallied to new highs last week I failed to unload the whole position. Instead I watched it sink back to $8.84 from the $12.20 high. I only managed to sell 10 of my 45 contracts - at an average cost of $1.85 - barely recovering my initial investment. The additional $7,500 of profit was squandered!

After the mistake in GNTA that leaves me with an all new LOW in equity to start the fall shorting - only $1,200....approximately. This is pretty bad. I have not given up yet - but the rest of this post will address some important changes in my assumptions for this fall.

I think the implosion of the commodities sector - mainly oil and metals is signalling slowing economic growth - not an increase in supply - but instead a decrease in demand. This should bolster the expectations of a market decline in the intermediate term - but in the short term I think the possibility of the market hitting new relative highs is a definite possibility.

As a result I think that we have to watch the fed meeting and the subsequent reaction closely. We also need to carefully consider whether the correct shorting point is late September with January 2007 timeframe or instead later 2006 start point with mid-2007 timeframe. Things will become clearer in the coming weeks. Until then - waiting patiently for now.

Best regards,

BG