Today, I am going to begin following the March contract of the Mini S&P Index.  The March Mini S&P Index is up 11.75 this morning at 1101.75 as I write.  The included chart shows that the S&P index is attempting to test back towards the recent price highs at 1107.00.  The chart is bullish as the S&P continues to make higher highs and higher lows.  This current rally is important to see whether prices can continue to make new highs and press on higher.  Based on the last few months of trading, the S&P should be ready to correct to the downside.  The directional movement indicators have been bearish recently but act like they may cross bullish today if the rally holds up.  So, today’s rally attempt is important to watch to see whether the recent highs hold back this rally or not.  Some of my other indicators are mixed on the strength of this rally.  So, I recommend standing aside in the S&P for now.

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.

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March Crude Oil is up $1.21 per barrel at $81.05 this morning as I write.  The included chart shows that crude oil has been slowly chopping lower in price after multiple tests at the contract highs in the $82.00 to $83.00 area.  After a spike down on Friday to below $75.00, March Crude Oil has managed to bounce right back into the recent trading range once again.  The major resistance is in the $82.00 to $83.00 area.  The directional movement indicators are bearish but narrowing, and the ADX line is meandering sideways.  For now, I see this as just one more of many previous rally tests back towards the highs with the expectation of another price failure.  A close out over the contract highs at $83.60 would be very bullish, though.  This latest rally over the past 24 hours has to do with the Iranians capturing a British sailing boat that apparently veered into Iranian waters while racing towards Dubai.  This is on top of news lately that Iran does not plan on cooperating with the UN on its nuclear ambitions.  So you can imagine all the military scenarios that some speculators want to conjure up.  In my opinion, it would be an extremely difficult task for Israel to destroy Iranian nuclear capabilities by itself when, theoretically, these facilities are buried deep inside of mountains.  It would almost have to be an inside job.  At least one other Arab country in the region wants to know why Iran should end its nuclear ambitions when Israel already has nuclear capabilities and shows no signs of ending its own nuclear development.  Who knows what will eventually happen, but I just wanted to point out how difficult it will be to get Iran to stop developing its nuclear capabilities without international help.

 Followers of this letter should have the following positions:

 Followers should also be 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 78 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.

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March Natural Gas is down 5.9 cents at $4.93 this morning as  I write, following yesterday’s sharp selloff.  The included chart shows that the natural gas market is still trending down and is beginning to challenge its contract lows in the $4.70 area made a week ago.  In my opinion, since natural gas made new contract lows a week ago, March natural gas will need to find a low down here somewhere and then rally, then test and hold above the lows, and rally again to begin showing signs that a long term bottom is being made.  This up and down consolidation will be needed to last for a month or so to prove its support.  So, in my opinion, there is no reason to put on any long term positions in natural gas until proven otherwise.  During the winter season, there may be some times where it may be worth buying the closer in contracts, but without a lot of fundamentals coming into play, natural gas looks dead in the water.  The directional movement indicators have been bullish near term, but are about to cross back to the bear side if prices stay down today.  The ADX line continues to drop.  Most of my other indicators in natural gas are bearish.  I recommend standing aside in natural gas for now.

 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.

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February Gold is up $12.60 per ounce this morning at $1194.90 as I write on a weaker dollar.  February gold is testing near its contract highs made last week in the $1200 area.  The included chart of gold shows a very strong trend this is in overbought territory.  The problem with that is that strong bull markets can remain overbought for long periods of time.  The directional movement indicators are bullish but the ADX line is still rolling over just slightly.  It could be that last Friday’s hiccup in the market over the Dubai news could have just been a one off type of selloff.  We shall see how gold trades today near its contract highs.  If prices stall and reverse today, then the ADX may be telling us something about a potential correction that could be beginning.  If prices storm past $1200, then that would give us more evidence that last Friday’s price action was just a blip inside this raging bull market.  For today, I recommend buying one April Gold ($1550 strike) call option and sell 2 April Gold ($1700 strike) call options at a credit of $1.00, which is $100 gross credit.  I am continually trying to add on more coverage on up from my expected target as long as I can do the trades for credits.

 Don’t forget that we are still trying to buy back the four short February Gold ($935 strike) put options for $1.00 per ounce each.

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Long 2 February Gold ($960 strike) put options at $10.40 each.

Short 4 February Gold ($935 strike) put options at $6.20 each.

Long 2 February Gold ($970 strike) put options at $10.60 each.                 

Long 1 February Gold ($1140 strike) call option at $23.90.

Short 1 February Gold ($1180 strike) call option at $16.90.

Long 1 February gold ($1270 strike) call option at an average cost basis of $5.00 per ounce.

(February Gold options expire in 56 days).

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Long 1 April Gold ($1210 strike) call option at $33.00.

Short 2 April Gold ($1300 strike) call option at $17.50 each.

Long 1 April Gold ($1275 strike) call option at $17.80 per ounce.                 

Short 2 April Gold ($1400 strike) call options at $9.90 per ounce each

Long 1 April Gold ($1375 strike) call option at $11.80.

Short 2 April Gold ($1500 strike) call option at $6.90 each.

(April Gold options expire in 114 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.

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The March Euro is up 81 ticks at 1.5065 this morning as I write.  The included chart shows that the Euro is trying to challenge its contract highs made a week ago in the 1.5135 area.  The directional movement indicators are bullish but the ADX line is edging lower.  There is some Bollinger band resistance in the area of the contract highs.  I would expect the Euro to struggle trying to get past the contact highs in the near term.  I recommend holding current positions as is.

 Followers of this letter should also be long one December Euro (158.00 strike) call option from 32 ticks and short 2 December Euro (160.00 strike) call options from 20 ticks each for a combined credit of 8 ticks or $100 gross.  Option expiration is in 3 days.

 Followers should also be long one March Euro (1.3850 strike) put from 121 ticks and short 2 March Euro (1.3400 strike) put options from 67 ticks each for an overall credit of 13 ticks or $162.50 gross.

You should also be long one March Euro (1.5750 strike) call option at 134 ticks and short 2 March Euro (1.6100 strike) calls at 75 ticks each or $937.50 each. 

 March Euro options expire in 94 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.

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The March Dollar Index is down 36 ticks at 74.925 this morning as I write.  The included chart shows that the dollar index continues in its long term downtrend.  The contract lows made a week ago was at 74.545.  The directional movement indicators are bearish but the ADX line continues to edge lower.  There is some good Bollinger band support near the contract lows.  That along with the non-trend confirming ADX suggests that we should continue to stand aside in the dollar for now.

 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.

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March Treasury Bonds are down 21/32 at 122:02 this morning as I write.  The included chart shows that the T-bonds continue to be involved in an intermediate term uptrend despite the resistance in the 123:00 area.  The directional movement indicators are bullish and the ADX line is beginning to rise.  I am looking for a good correction in the bonds to put on a long oriented trade.  For now, stand aside on any new positions.

 Followers should also be long one March Bond (114:00 strike) put from 2 12/64 and short 2 March Bond (110:00 strike) put options from 1 9/64 each for an overall credit of 6/64 or $93.75 gross.

You should also be long one March Bond (108:00 strike) put option from 52/64 and short 2 March Bond (105:00 strike) put options from 29/64 each or an overall credit of 6/64 or $93.75 gross.

March options expire in 80 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.

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