March Crude Oil is virtually unchanged this morning at $76.14 as I write.  The included chart shows that crude oil has gone from a bullish consolidation bull flag to a sagging mess.  The chart suggests that prices will eventually test down towards the upward trending intermediate trend line down in the area of $70.00 per barrel.  Also, lows made in the March contract hit near $67.00 in late September and near $64.00 back in mid July.  For today, I recommend buying one March Crude Oil ($69.00 strike) put option and selling two March Crude Oil ($64.00 strike) put options at an overall credit of 30 cents of $300 gross.  My expectation is that the $70 area will hold, but if it doesn’t there is good support down in the $67 to $64 area.  If filled, this trade will pay us $300 gross up front, so if prices never make it down to $69 by expiration, then we will keep the credit.  If at expiration on February 17^th, prices close near $64, then our potential gain could be the difference between strike prices of $5.00 or $5000 gross.  The risk is that if prices spike down too soon in the direction of $64, then we would have to exit the trade for some sort of loss, the amount of which depends on how long it take to get down there to those price levels.  The best case scenario is for March Crude Oil prices to fall to the $64 level very near the expiration date.

 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 70 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 down 96 cents at $76.59 this morning as I write this letter.  The included chart shows that March Crude Oil prices are beginning to break down out of the slanted consolidation that has taken place over the past six weeks.  The next good support for crude oil will come near the longer term uptrend lines near the $70.00 area.  I am not getting enough confirming signals to take a new position in crude oil at this time so I recommend standing aside from any new trades.  I am happy to hold on to our ratio put spread for now.  Eventually, if crude oil prices support in the $70.00 area and begin to build a base, I may want to start accumulating long positions to get back on the longer term bullish trend.  For now we will watch from the bench.

 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 71 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 12.6 cents at $$5.223 this morning as I write.  The included chart shows that natural gas is having a nice short covering rally with the current cold weather.  Technically, the long term trend is still down.  A lot of base building needs to take place to convince me that a long term buy is worthwhile, ever since the contract lows were breached recently.  The directional movement indicators have been flipping back and forth from buy to sell and back to buy again recently.  My other indicators are mixed.  Meanwhile the ADX line continues to fall, suggesting no strong trend.  I recommend standing aside in natural gas.  If you are long natural gas, I would recommend liquidating on this rally.

 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 86 cents at $77.86 this morning as I write.  The included chart shows that March Crude Oil continues to sag in the consolidation that began in late October.  This sagging consolidation area looks like a gigantic bull flag formation.  That is the positive view.  The negative view is that this consolidation continues to look like it is sloping over.  My experience with flag formations is that they should form and break out soon after forming.  The longer they linger, like this one, they tend to evolve into something else.  If you look at a weekly chart of Crude Oil, you would notice this flag, and you would also notice that the important longer term support comes in at the $70.00 area.  So, until proven otherwise, I would expect crude oil to continue to sag down to the lower $70’s in price.  We still can’t ignore the fact that there is a bull flag still forming that hasn’t broken down yet.  If the top side of that flag comes out, and prices close over the $83.00 to $83.50 area, then crude oil prices would be very bullish.  Until then, expect more sagging consolidation to take place.  The directional movement indicators are bearish and the ADX line is meandering sideways.  Long term trends still point bullish.

 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 72 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 28.9 cents at $4.996 this morning as I write.  The included chart shows that March natural gas has rallied off of their contract lows sharply over the last two days.  This rally, so far is well short of the correction rally that ended a week ago in the $5.37 area.  The longer term trend is still down, and this rally is just a bounce in a bear market, in my opinion.  The directional movement indicators may flip back to the bull side after flipping back and forth over the last few weeks.  The word , whipsaw, comes to mind.  This is why I always like to confirm any new trades with my other technical indicators before entering.  At this seasonal winter time of the year, I usually don’t like to trade the short side of natural gas, so if I am bearish, I usually stand aside.  Now, if natural gas can do a lot of base building over the next few weeks, and give me some valid buy signals, then I will get excited about natural gas again.  For now, stand aside.  If you are long natural gas, I would use this rally to get flat.

 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 23 cents at $79.88 per barrel following a better than expected employment report this morning.  The included chart of March crude oil shows that the longer term trend is still up, but prices are stuck inside this trading range between $77 and $83 over the past six or seven weeks.  A close below the bottom end of the range should enable crude oil prices to test down to the lower $70’s near the longer term support.  A close over $83.50 would be very bullish.  I recommend not entering any new positions in crude oil until the picture becomes a little more clear.

 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 75 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 13.1 cents at $4.717 this morning as I write.  The included chart on March Natural Gas shows a market entrenched in a bear market.  So far, prices are getting a nice bounce today, but the overall trend is down.  Strong rallies in the near term should be sold in to.  The directional movement indicators are bearish and the ADX line is meandering sideways.  I still have the opinion that natural gas needs to do a whole lot of based building to get me excited about putting any new long term positions on.  I think that the pressure will remain on the bulls to prove their case all winter long.

Production is still too high for the huge inventories on hand.  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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March Crude Oil is down 9 cents at $79.36 per barrel as I write.  The included chart on March Crude Oil shows a market that is in a choppy range between  primarily $77.50 to $83.00, although there have been a few short term spikes down through the bottom end recently on outside news events, like Dubai.  The longer term trend for crude oil is up.  As a matter of fact, I have drawn a good long term uptrend line in red on the chart that comes in around the $70.00 area.  Prices could fall all the way back towards $70.00 and still be in a longer term bull market.  Any price closes above the $83.50 area would be very bullish.  In the mean time, supplies of crude oil and gasoline in the US are ample according to the latest supply numbers.

 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 76 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 2.7 cents at $4.639 this morning as I write.  The included chart of March natural gas shows that prices have now traded to new contract lows.  This is not a good sign considering that it is happening right when the whole country is seeing its harshest cold front of this late fall season to date.  This goes to my point that production is still way too high and storage is way too high compared to the demand for heating or industrial use.  Producers have to get their production under control or they will face going out of business eventually.  The market will force the issue.  As high as inventories are at this time, we will need to see an extremely colder than normal winter to get those excess supplies down to a normal level.  A normal winter at this point, would be bearish for prices.

The directional movement indicators are bearish and the ADX line is falling.  Now that natural gas prices have made new contract lows, for me to get long term bullish, prices will have to have a strong rebound rally then a successful test back towards the lows and then another rally.  This could take weeks or longer.  In the mean time, don’t be surprised to see short term sharp price bounces as we enter the winter heating season.  I would expect all the price bounces to be met will heavy hedge selling by the producers.  I am standing aside for now.  If you happen to still be long natural gas, I would highly recommend liquidating positions on sharp rallies.  If we have a mild to normal winter season, expect prices to return to the mid $2.00 area  where prices were in early September.

 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 47 cents at $80.47 this morning as I write.  The included chart shows that March crude oil continues to struggle on rallies towards the $82 to $83 area.  Clearly, if March Crude oil were to be able to close above the $83.50 area, that would be a very bullish event and we would have to consider getting long at that point.  But, in the mean time, crude oil seems to be building a near term top that could send prices down towards good support in the $70 area.  The directional movement indicators are bearish but the ADX line continues to slide lower.  In the intermediate term picture, crude oil appears to be stuck in a $12 trading range between $70 and $82 per barrel.  This all looks like an intermediate term correction inside a longer term bull market.

 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 77 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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