Bush is lifting the executive order which his father put in place, banning offshore drilling on the outer continental shelf. This will be interesting, especially if the Democrats call foul and try to block this move. Crude oil futures probably will not care much about this move one way or another as any drilling will take years to have an effect, but it won’t go unnoticed on voters.

Our first tropical depression that has a chance of reaching the gulf has now formed and will soon become a hurricane. It’s a bit early to call its course but look for Nat Gas to pop above 12 on this news. Crude is hanging around 145 right now showing no signs of coming in as the Feds take over Indymac Bank and promise help to Fannie Mae and Freddie Mac by accepting their agency collateral for direct cash borrowings at the discount window, and hinting at some deal for equity holders.

The Fed has really stepped into it again as the dollar weakens on all this and I suspect the 1.60 mark vs the euro will be crossed very soon. Gold continues to rally with $1000/oz in its sights now. Investors are bailing on stocks again as there is simply no support in sight . . . it appears that a big, high volume capitulation is coming soon, most likely taking the S&P down to 1200 or below on an intraday move . . . look for a down 500 Dow point intraday move soon as a temporary bottom.

There are many false rumors flying about banks in the market community right now. The VIX is pushing 30 now, that’s getting up there but it certainly is justified as every rally in the stock market gets beaten down like a red-headed step child. The whipsaw is going to be the case in all commodities for the next few weeks . . . look for extremes in both directions.