When bad news becomes good news: Oh sure the economic data did not get any better. New homes sales were a disaster and the Energy Information Agency report was very bearish yet the good news is that a lot of the bad news was already priced in. Now doesn't that make you feel better? Yes things are lousy but as bad as they are at this point in time we actually priced in that things were even worse! Yippee!! Time to celebrate! Forget that doom and gloom of Tuesday. Now its doom and zoom as the market tries to tell itself hey nothing can be that bad! Can it? Well I hate to be a bummer but it can. The oil inventory report shows that the economy has slipped back into recession. It is a portrait of everything that is wrong about the economy. Oil and product supplies are surging reflecting the same things we have seen in other markets. It shows that the economy, somewhere in the middle of summer, hit a brick wall and went back into recession. Oh sure some may say that the builds are seasonal and that this is to be expected yet the magnitude of oil supply and the direction demand is going is sending out clear signals that something is wrong. The oil market is saying that we are double dipping. Consider the numbers the EIA reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.1 million barrels from the previous week. At 358.3 million barrels, U.S. crude oil inventories are 9.5% above the five year average. Total motor gasoline inventories increased by 2.3 million are an incredible 11.5% above the five year average. Distillate fuel inventories increased by 1.8 million barrels are an absolutely astounding 28.4% above the five year average. Over all products are near all time highs and rising and the numbers suggest more than your typical seasonal slowdown. No these numbers suggest something is wrong. The economy is backing sliding and it is clear as you look at these recent reports. Of course the rebound in oil might be suggesting that perhaps the market feels that the Feds latest stimulus will give the economy a bit of a boost or maybe it's just profit taking or maybe it's about EARL. Yes Earl. The latest tropical storm that may or may not become a threat to the Gulf of Mexico. The early Earl track suggests that it should not hit the Gulf yet it is too early to be too sure. The storm may have an impact on trade but stay tuned. Nat Gas gets cracked going below the $400 area. The $380 area is key support if they take that out we could see the low created last September near $250! For natural gas traders that really was a September to remember! Bearish reports and oil rallies! That why it's time to quit being a bear or bull and just become a wolf. It is time to trade like a wolf! With wide swings and crazy volatility you have to be quick and agile! So make sure you get my daily buy and sell points by calling me at 800-935-6487 or email me at pflynn@pfgbest.com. And make sure wolf down your business news on the Fox Business Network where you can see me every day!

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