Oil and commodity prices are falling, and today the SEC has extended its emergency order prohibiting naked short selling until August 12th. The stocks protected from naked short selling are as follows;

BNPQF- BNP PARIBAS
BNPQY- BNP PARIBAS ADR
BAC- Bank of America
BCS- Barclays
C- Citigroup
CS- Credit Suisse
DSECY- DAIWA SECURITIES
DB- Deutsche Bank
AZ- Allianz
GS- Goldman Sachs
RBS- Royal Bank of Scotland
HBC- HSBC Holdings
BSI- Blue Square Israel
JPM- JPMorgan Chase
LEH- Lehman Brothers
MER- Merrill Lynch
MFG- Mizuho Financial
MS- Morgan Stanley
UBS- UBS
FRE- Freddie Mac
FNM- Fannie Mae

I'm just curious. What qualifications must a stock have to be placed on this protected list by the SEC? Why isn't naked short selling outlawed across the board? Why does the SEC have to extend an order for an illegal action if naked short selling is truly illegal?

If oil and commodity prices continue to fall, and are falling for reasons other than election year manipulation, the Fed will not have to worry about the inflation problem for much longer. If energy prices stay down after the election, the Fed will not have to be in any hurry to hike interest rates. This would be great news for us, and the stock market.

Our oil and gas short has worked beautifully. We added the (DUG) Ultrashort Oil & Gas Proshares to the DG portfolio on May 23 at $27.85/ share. The fund is trading near $39.00 giving us an unrealized gain of 40% or $11.15 points on the upside.

For those of you who follow my picks on Tipstraders.com, for some reason the website sold my DUG position without me knowing about it. I plan to hold the DUG shares into September unless I feel oil prices are set to rise again.

Here is a rundown of our other holding in the ETF portfolio;

DBA: Powershares DB Agriculture Fund-
Cost Basis: $34.77/ 1-24-08
Cur.Px: $34.26

EWZ: Brazil Index-
Cost Basis: $65.01/ 11-19-07
Cur.Px: $76.00

SLX: Market Vectors Steel Index-
Cost Basis: $77.38/ 11-25-07
Cur.Px: $80.87

FXF: Currency Shares Swiss Franc-
Cost Basis: $89.69/ 1-7-08
Cur.Px: $94.82

EEB: Claymore ETF BNY BRIC-
Cost Basis: $50.16/ 10-8-07
Cur.Px: $43.80

DDM: Ultra Dow 30 Proshares-
Cost Basis: $58.09/ 7-7-08
Cur.Px: $61.80

DUG: Ultrashort Oil & Gas Proshares-
Cost Basis: $27.85/ 5-23-08
Cur.Px: $39.00

PGJ: PS Golden Dragon China-
Cost Basis: $21.31/1-3-07
Cur.Px: $24.32

KBE: KBW Bank ETF-
Cost Basis: $42.50/ 2-11-08
Cur.Px: $33.66

IYF: iShares Dow Jones US Financial Sector-
Cost Basis: $89.31/ 1-24-08
Cur.Px: $73.51

Today, a barrel of Light Sweet Crude is trading at 119.90 (-2.84 from Monday) and the dollar rose to a six-week high against the euro.

The Fed is expected to leave interest rates at 2.00 percent as the economy continues to show extreme weakness.

Yesterday's markets were soft on economic news that showed the largest jump in consumer inflation since 2005. Oil prices dropped despite news of a Tropical Storm in the Gulf of Mexico. This is great news for the economy, but what happens after the election is any body's guess.