March Natural Gas is down 5.1 cents at $5.910 this morning as I write.  The included chart shows that natural gas is still involved in a near term up trend because of all the current cold weather forecasts.  The thing that I insist on, that traders need to be careful of in this scenario is the fact that there is still about 700 billion cubic feet of excess natural gas that needs to be run off just to get back to normal supply levels.  This will require the weather to remain much colder than normal for the next couple of months which is unheard of in any year that I can ever remember.  Remember that normal temperatures for places like Chicago will become in the 20’s, so for extra natural gas to be used, temperatures will have to consistently be in the single digits to teens consistently pretty soon to make any difference.  That would be a tall order for any winter time.  Regardless of what I think, we still have to go by what the charts say.  Right now, the directional movement indicators are bullish and the ADX line continues to rise.  The weekly charts are also starting to show some bullish life.  The next resistance levels to be concerned with are the November highs in the $6.20 area, just ahead.  That $6.20 area is also the last important weekly high that was made in the ongoing longer term bear market.  A weekly close over the $6.20 area would be the first instance where the natural gas market would be making a higher high, which is the first sign of a new long term bull market taking shape.  If prices fail up here, shy of the $6.20 area and then roll back down again, then nothing has changed, and we would still be in a secular longer term bear market.  My prediction is that in the really big picture, ever since Natural gas hit the all important long term support in September down around $2.40, prices hit bottom for the bear market.  I believe that these months past September are the beginning stages of a long term support base being built that will eventually be what supports the next long term secular bull move that may last for a few years.  Therefore, I think that it will be import to watch the next big selloff in natural gas for signs of a bottom being formed to accumulate long term bullish positions.  This will be a multi-month process, so patience will be required.  Stand aside 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 down $1.70 per ounce at 1106.30 this morning as I write.  The included charts shows that near term on this bounce, February Gold is beginning to have some trouble with prices very near the brown 40 day exponential moving average in the $1115.00 area.  So, near term, February gold seems to have near term support right along the 90 day exponential moving average, in the $1075.00 area growing resistance along the 40 day average in the $1115.00 area.  The directional movement indicators are still bearish but narrowing and the ADX line continues to fall.  The longer term trend for gold is up, and we need to stay focused on this correction to get ready to add to our long positions.  If and when the gold market gives me some clear signal of another bull move, then I will look to be more aggressive to add new positions.

 Followers of this newsletter should have the following positions:

 Long 2 February Gold ($960 strike) put options at $10.40 each. (The cost basis is zero if you consider the profit made on the short $935 puts that were associated with this trade originally).

Long 2 February Gold ($970 strike) put options at $10.60 each.  (the cost basis is zero if you consider the profit made on the short $950 puts that were associated with this trade originally).               

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

(February Gold options expire in 28 days).

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Long 1 April Gold ($1210 strike) call option at $33.00.  (The cost basis is now $23.00 if you consider the covering of the one short April Gold $1300 call option on December 22^nd).

Short 1 April Gold ($1300 strike) call option at $17.50 each.

Long 1 April Gold ($1275 strike) call option at $17.80 per ounce.   (The cost basis is now $11.90 if you consider the covering of the one short April Gold $1400 call option on December 21^st).              

Short 1 April Gold ($1400 strike) call options at $9.90 per ounce each

Long 1 April Gold ($1375 strike) call option at $11.80.  (The cost basis is now zero if you consider the covering of the two short April Gold $1500 call options on December 22^nd).

 (April Gold options expire in 86 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 22.5 ticks at 77.79 this morning as I write.  The included chart shows that the downside correction of the intermediate uptrend in the dollar continues.  The directional movement indicators are bullish and the ADX line continues to edge higher.  Yesterday, I recommended to try to buy back the short March Dollar index 79.00 call option for 80 ticks.  So far that trade has been unable to get filled but we will continue to work the order GTC.  I also want to leave the protective stop in the same spot as listed below.

 Followers of this letter should be long one March Dollar Index futures contract from 76.585, and be using a protective stop at 77.15 GTC. 

You should also be short one March Dollar Index (79.00 strike) call option from 130 ticks or $1300 gross.

There are 66 days left until the March Dollar index options expire.

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 4/32 at 114:28 this morning as I write.  The included chart shows that the down trend in bonds continues.  As mentioned before, the initial projected downside target of the March T-Bonds coming off of the double top is 111:00.  I may begin taking some profits if prices fall towards the 111:00 area soon.  The directional movement indicators are bearish and the ADX line continues to rise.

 Followers should be:

 Long one March Bond (114:00 strike) put option from 2 12/64. (Cost basis of 28/64, or $437.50, if you include the buy back of the two short 110:00 put options on December 8th).

Long one March Bond (108:00 strike) put option from 52/64.  (Cost basis of 2/64, or $31.25, if you include the buy back of the two short 105:00 put options on December 8th).

Long one March Bond (117:00 strike) put option from 128/64.

Short one March Bond (113:00 strike) put option from 51/64.

March options expire in 52 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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Overnight, March Corn was up 8 ¼ cents at $4.16 ¾.  That was an impressive rally.  Word is that most of the cargo ships that carry grain are currently booked until the end of the first week or two in January hauling soybeans to countries like China.  Since South America had weather problems with their soybean crop, many countries have come to the US to buy soybeans.  This was happening a few weeks ago, and now the ships are being used to transport the grain.  This explains why, even though export sales of corn have been high, shipments have been low.  That means that once the soybeans have been shipped, those ships will be coming back for the corn.  Corn may be beginning to rally in anticipation of that event.  All I know is that March corn is still trading within the $3.75 to $4.25 trading range and once prices close out of that range I will get excited.  I have to admit that this action overnight is very impressive and takes out the highs from a week ago giving a subtle hint that corn may be ready to break out to the upside.  Stay tuned.  For now, we will hang on to our current ratio call spreads.

 Followers of this letter should be long one March Corn ($4.30 strike) call option from 17 ¼ cents and short 2 March Corn ($4.90 strike) call options at 7 3/8 cents each.  (As a result of the profit made on the short $3.20 puts, our cost basis of this ratio spread is now a 1 cent credit!)

There are 53 days left until March options expire.

 With all the price tests above $4.00 recently,  I would hope that the producers have already liquidated most if not all of their corn that needs to be sold.

 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 Mini S&P Index is up 2.75 points at 1124.75 this morning as I write.  The included chart shows that the S&P index continues to sludge forward to the upside.  The directional movement indicators are bullish and the ADX line is beginning to rise.  What can I say, this is bullish action.  Since the 1080.00 area seems to be where the recent lows held, here is a trade recommendation.  I recommend buying one March Mini S&P futures contract right here, and then selling one March S&P 1080.00 strike call option a current prices as well.  This is a deep in the money covered call write trade that gives us a lot of downside protection.

 Followers of this letter should be long one March Mini S&P (1190 strike) call from 17.00 and short 2 March Mini S&P (1220) call options from 9.50.

You should also be long one March Mini S&P (1000.00 strike) put option from 23.00 points and short 2 March Mini S&P (935 strike) put options from 12.75 points each for a total credit of 2.50 points or $125 gross.

March Mini S&P options expire in 81 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 Crude Oil is up 59 cents at $79.25 per barrel this morning as I write.  The included chart shows the impressive rally off the recent lows in crude oil.  Even the directional movement indicators are close crossing back to the bull side.  The chart shows a light blue trend line coming down over the highs that were made during October and November, that comes in today near $80.30.  A close over $80.30, especially at week’s end would be very impressive and probably warrant a new long trade.  Until then, I would be watching for a place to sell.  For now, hold on to current positions.

 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 51 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 up 18.6 cents at $5.872 this morning as I write.  Prices are higher today as some forecasters are predicting that more wintry weather is ahead into the middle part of January.  It is interesting to note that most of the delivery months out two years or more are all within 10 cents of their contract lows.  So, near term prices are concerned about near term cold weather.  Longer term markets still see an over burdensome supply situation into the future.  I believe that the longer term contracts won’t enter into a long term bull move until it becomes more clear that Congress will pass an energy bill that includes incentives for natural gas use, industrial demand picks up and the amount of supply coming online slow down.  Longer term players know that until these things happen, this current cold wave will need to show much below normal temperatures for the next couple months consistently to work off 700 billion extra cubic feet of supply in the pipelines to simply get back to normal supplies.  That is a tall order for the weather to pull off.  Regardless of those fundamentals, I can’t ignore what the charts are saying.  Right now, the weekly charts are looking more and more bullish in their shape.  The daily chart is trading and struggling with the 200 day moving average and still about 30 cents below the November price highs.  A close above the November price highs would begin to change the cycle from lower highs and lower lows to our first new weekly higher high in a low time.  That would be the first sign of a market attempting to put in a long term low.  We shall watch and see.  For now, stand aside.

 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 $6.10 per ounce at $1110.90 this morning as I write.  The included chart shows that gold is bouncing off of the recent price lows.  So, is this the beginning of the next bull market leg to the upside?  The directional movement indicators are bearish but narrowing, and the ADX line is edging lower.  This all suggests to me that it is possible that the low is in, but that there will probably be some more back and forth trading before the next bull leg is ready to take off.  Stay tuned.

 Followers of this newsletter should have the following positions:

 Long 2 February Gold ($960 strike) put options at $10.40 each. (The cost basis is zero if you consider the profit made on the short $935 puts that were associated with this trade originally).

Long 2 February Gold ($970 strike) put options at $10.60 each.  (the cost basis is zero if you consider the profit made on the short $950 puts that were associated with this trade originally).               

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

(February Gold options expire in 29 days).

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Long 1 April Gold ($1210 strike) call option at $33.00.  (The cost basis is now $23.00 if you consider the covering of the one short April Gold $1300 call option on December 22^nd).

Short 1 April Gold ($1300 strike) call option at $17.50 each.

Long 1 April Gold ($1275 strike) call option at $17.80 per ounce.   (The cost basis is now $11.90 if you consider the covering of the one short April Gold $1400 call option on December 21^st).              

Short 1 April Gold ($1400 strike) call options at $9.90 per ounce each

Long 1 April Gold ($1375 strike) call option at $11.80.  (The cost basis is now zero if you consider the covering of the two short April Gold $1500 call options on December 22^nd).

 (April Gold options expire in 87 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 41 ticks at 1.4394 this morning as I write.  The included chart shows that the March Euro is bouncing after selling off steadily over the past three weeks.  For now, I expect that this is just a price bounce before the Euro attempts to selloff further.  The directional movement indicators are bearish and the ADX line is still rising suggesting that there should be more selloffs coming in the Euro.  I recommend holding on to our current position. 

 Followers should 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 for an overall credit of 16 ticks or $200 gross.

You should also be short one March Euro futures contract form 1.4769, and short one March Euro (1.5100 strike) put at 535 ticks, or $6687.50.

 March Euro options expire in 67 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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