September Crude Oil is down 68 cents at $70.25 this morning as I write. The employment report on Friday was seen as a bullish item by the stock market, so the market rallied, but this time without crude oil. So there seems to be some sort of divergence between crude oil and the stock market for now. Maybe people are beginning to pay attention to the huge oversupply of crude oil and the strengthening dollar. The price action in crude looks like prices are beginning to bend over for some sort of near term price break. Aggressive followers of this letter should be long the September Crude Oil ($60.00 strike) put option and short 2 September Crude Oil ($55.00 strike) put options from a credit of 30 cents. There are 8 days left until option expiration.

Aug. 10, 2009
David Hall