March Crude Oil is down 41 cents at $76.84 this morning as I write.  The included chart shows that yesterday, March Crude Oil had a very strong rally on a larger than expected draw down in crude oil inventories for the past week, though many believe that this was artificial because of all the fog in the Houston ship channel last week, that prevented many oil tankers from reaching port to offload their inventory.  If this is true, we should see supply adjustments in the next couple of weekly reports.  Technically, March Crude Oil rallied right up to the back side of the previous market breakdown below the two month consolidation and right to the 40 day moving average.  If I am right, prices should begin to stall up here, like they are today, and then erode back towards the $70.00 area.  I will be watching that pull back for clues and patterns that develop suggesting when the next trend will occur.  Until then, hold on to current positions.  HAPPY HOLIDAYS!!

 Followers of this letter should have the following positions:

 Long one March Crude Oil ($69.00 strike) put option from $2.90

Short 2 March Crude Oil ($64.00 strike) put options from $1.65 each.

Long one March Crude Oil ($62.00 strike) put option from $1.51.

Short 2 March Crude Oil ($57.00 strike) put options from 83 cents each.

 March Crude Oil options expire in 55 days.

 David Hall

 The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options can be substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.

 This newsletter is not intended for dissemination to the public without prior approval from David Hall.