March Crude Oil is up 87 cents per barrel at $75.93 this morning as I write.  The included chart shows that March Crude Oil is attempting to challenge the near term resistance overhead in the vicinity of the 90 and 40 day moving averages along with the underside of the previous consolidation range that formed during October and November.  This near term resistance runs from $76.00 to $77.00.  My expectation is that crude oil will run out of steam on this rally attempt and roll over once again and test for lower price levels again.  The directional movement indicators bearish and the ADX line is meandering sideways.  I recommend holding our 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 56 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 6.6 cents at $5.668 this morning as I write.  The included chart shows that March Natural Gas has been struggling with the downward sloping 200 day exponential moving average (the green line).  The directional movement indicators are bullish but beginning to narrow, and the ADX line is now meandering sideways.  I believe that natural gas has discounted in all the current cold weather and the forecasts for the next week or so.  If weather forecasters can show that January will be a colder than normal month, then natural gas may have more rally ahead soon.  The rumor is that weather forecasters may forecast a warmer than normal January because of El Nino.  If that actually happens, then look for natural gas to completely give back the entire recent gains.  The technical indicators are beginning to show that the natural gas market is not quite sure of itself at this time.  I recommend standing aside in natural gas for now.  The risk/reward for any new trades are too high.

 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 down 28n cents per barrel at $74.27 this morning as I write.  The included chart continues to show the large dome of price resistance overhead in the $76.00 to $83.00 area that looms over the crude oil market.  It will take a major news event or a lot of time for crude oil prices to get through that dome of resistance anytime soon.  That being said, the longer term secular trend is still bullish, so I term this selloff in crude oil a large correction in a longer term bull market.  The next big support level in March Crude Oil will be the $71.00 area where the major uptrend line is located, shown in red on the chart.  If prices don’t hold the $71.00 area, then you could say that crude oil may be entering an intermediate term bear market.  We will hold our current positions and watch what happens.

 Followers of this letter should have the following positions:

 Long one March Crude Oil ($69.00 strike) put option from $2.90 and short 2 March Crude Oil ($64.00 strike) put options from $1.65 each for an overall credit of 40 cents or $400 gross.

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 57 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 8.1 cents at $5.613 this morning as I write.  The included chart suggests that natural gas may have discounted all the winter weather and then some into current prices.  Now that there are some weather forecasters predicting a warmer than normal January because of the El Nino effect, traders in natural gas are getting a little nervous.  You can’t blame them considering the huge overhand of supply that still haunts this market.  The directional movement indicators are still bullish but the ADX line that was rising, has begun to meander sideways, suggesting that the uptrend has lost its steam, at least for now.  To me, the weekly longer term charts are beginning to look more bullish, so if prices do set back sharply over the next week or two, I will be watching closely on whether to take a shot at the long side or not.  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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March Crude Oil is up 53 cents at $75.76 per barrel this morning as I write.  The included chart shows that March Crude Oil is encountering heavy technical resistance in this $76.00 area right up against the 90 day exponential moving average and the area of the break down point of the large sideways consolidation formed during October and November.  That large dome of resistance between $76.00 and $83.00 will probably take a long time to get through.  The picture, technically, is bearish and this dome of resistance is the evidence of the bearishness in the intermediate term.  The long term secular trend is still up.  The directional movement indicators are bearish but the ADX line is beginning to meander sideways after a period of rising.  OPEC has their yearend meeting beginning tomorrow and it is widely expected that they will leave their productions quotas the same.  The reality is that domestically here in the US, refineries are losing money so they are operating at around 79% capacity, which is way below the 90+% run rate that should be the case right now.  Supplies of gasoline and heating oil and other fuels are ample right now, so those prices aren’t high enough together, to offset the cost of the crude oil the refineries have to buy to make those products.  Hence the lower refining capacity.  So the lower demand from the refineries to buy crude oil inventory makes it difficult for crude oil to sustain any price rallies.   Therefore, if the refined product prices can rally in relation to crude oil over the near term, you may begin to see the refineries pick up their demand for crude oil.  The charts are telling me to have a negative bias in crude oil for now, so I recommend maintaining our current positions.

 Followers of this letter should have the following positions:

 Long one March Crude Oil ($69.00 strike) put option from $2.90 and short 2 March Crude Oil ($64.00 strike) put options from $1.65 each for an overall credit of 40 cents or $400 gross.

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 58 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 12.1 cents this morning at $5.684 as I write.  Despite the winter storms over the Northeast the last few days, natural gas is struggling to hold on to rallies.  The included chart shows that the rally in natural gas may be running out of steam suggesting that the price has discounted the winter weather so far.  As a matter of fact, the way the futures markets work, I wouldn’t be surprised if natural gas futures haven’t already discounted a lot more winter weather.  All I know is that, the below normal temperatures in the northern states will have to remain and stay consistent for the next several weeks to maintain rallies in natural gas, considering the overhang of huge supplies.  March natural gas is running into resistance at the 200 day moving average and below the October highs.  I still 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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March Crude Oil is up 99 cents at $75.88 per barrel on unconfirmed news that Iran may have invade an oilfield in the southeastern corner of Iraq along the Iraq/Iran border.  The included chart shows that there is a huge area of resistance overhead, in all of that congestion, between $77.00 and $83.00.  It is going to take a long time to be able to work through all of that overhead supply unless there is some market changing world event that takes place.  In the mean time, prices have lately been able to rally back to the downward sloping 90 day exponential moving average and rally to the back side of the congestion area.  The directional movement indicators are still bearish and the ADX line has begun to move sideways after moving upward recently.  Until resistance overhead is broken, I expect that this rally in crude oil is just a short term bounce before prices run out of steam and resume their intermediate term down move.  Support comes in at the uptrend line around $71.00.  We will stay with current positions for now.

 Followers of this letter should have the following positions:

 Long one March Crude Oil ($69.00 strike) put option from $2.90 and short 2 March Crude Oil ($64.00 strike) put options from $1.65 each for an overall credit of 40 cents or $400 gross.

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 61 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 7.7 cents at $5.864 this morning following a very sharp rally yesterday.  Natural gas rallied sharply yesterday on news that the weekly supplies dropped by 207 billion cubic feet, which was a lot more than the 167 billion cubic foot draw that was expected.  The five year average for this week of the year is a draw of 127 billion cubic feet.  This was good news for the would be bulls.  So, instead of 800 billion cubic feet in excess supplies, we now have about 720 billion cubic feet in excess supplies.  If this cold weather, that includes well below temperatures, can last for the next two months then a large bull market in natural gas will be warranted.  Some weather forecasters are looking for January to be a much milder month in temperatures because of the El Nino effect.  If that comes true, then look for natural gas prices to fall way back towards the lows again.  That is always the difficulty in playing natural gas in the winter season; prices move at the whim of the latest weather forecasts.  For now, the weather is supposed to be very cold through year end.  Prices have probably already discounted much of that anticipated weather.

Technically, the directional movement indicators are bullish and the ADX line is rising.  The weekly charts are looking more bullish as well.  I would suspect that there is also an anticipation of a pickup in industrial demand.  That remains to be seen.  Prices have now rallied right into the 200 day exponential moving average, and the October weekly highs are just above here in the $6.20 area.  If natural gas prices can manage to close above the $6.20 area, then the market would, once again, be making its first higher high since making new contract lows a couple weeks ago.  All of this that I have mentioned in the last few sentences tells me to be watching the next correction selloff in natural gas for potential places to consider going long again.  For now, I don’t think that it is wise to chase this market right now.  The risk/reward on a long trade would be much higher than I would want to take on right now.  If the weather forecasters are correct for January, we will easily get chances to take a look at the long side of natural gas at that time.

 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 down 30 cents per barrel at $75.01 this morning as I write.  The included chart shows that March Crude Oil has a massive area of resistance overhead in the $80.00 to $83.00 area, that should take a long time to be able to pierce.  Now that prices have broken down out of that range, I would expect more downside testing in crude oil prices over the next month or two.  Near term, the obvious support comes in at about $71.00, which is right on the uptrend line coming up from the July lows.  A break of that area should put prices down towards the $67.00 and $64.00 areas of the previous weekly lows over the past six months.  The directional movement indicators are bearish and the ADX line is edging higher suggesting that this down move is not over yet.  I recommend holding current positions.

 Followers of this letter should have the following positions:

 Long one March Crude Oil ($69.00 strike) put option from $2.90 and short 2 March Crude Oil ($64.00 strike) put options from $1.65 each for an overall credit of 40 cents or $400 gross.

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 62 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 7.3 cents at $5.575 this morning as I write.  The included chart shows that March natural gas is still holding firm but has run into increasing resistance over the last few days.  So, has natural gas risen to a point that discounts all the cold weather we have had?  I would suspect that once the weather forecasters begin to predict more moderate temperatures, that we will see a potentially sharp drop in natural gas.  One big cold front is not going to draw down 800 billion cubic feet all at once.  Like I have said, it would take a whole season of much below temperatures to work this excess supply out of the pipelines.  So, in the short run, I expect that this rally is just a bounce in a bear market and a test back towards the contract lows will still take place.  I cannot ignore the pattern developing on the weekly longer term charts for natural gas.  That weekly chart is starting to look more and more bullish, so the next selloff in natural gas will be very important to watch for a potential buy.  No matter what I think the fundamentals are, if the longer term charts turn bullish, then I will have to play natural gas that way.  Stay tuned and stay flat 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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