OptionSellers.com

Good afternoon. This is James Cordier of OptionSellers.com, with a market update for March 28th. I thought we’d do something slightly different today. We’re going to talk about history, and then we’re going to talk about doing some very good option selling in 2016.

Several years ago, many of you may remember Rita and Katrina slamming into the Gulf of Mexico and ripping out natural gas and crude oil platforms. At the time, natural gas prices starting to soar and people thinking “How are we ever going to find any natural gas? How are we ever going to get any more crude oil?”

Prices spike. They go up some 40, 50, 60 percent basically overnight, and investors scramble to cover their shorts and go long commodities like natural gas. The entire time people are thinking “Well, natural gas will never come back down to the original price, certainly because of all the supply that has now come off of line.

Two years later, of course, natural gas is trading below the price prior to the storms that hit, and now, in 2016, natural gas is trading at $1 per million BTUs, roughly one quarter of what the price was prior to the storms. History tells us a lot that supply and demand will change, based on prices and based on consumer consumption.

What we’re looking at right now is we’re looking at coffee. Coffee market, several years ago, changed drastically, as Brazil at the time with the number one producer in the world received a freeze in southern portions of the growing regions. Coffee prices soar, one third of the coffee crop is demolished from the cold temperatures, and everyone scrambles to buy coffee and expecting it to never go back down to the original level.

One year later, coffee prices are trading below the pre-freeze price, and once again, supply is irredundant. This year, 2016, coffee prices start rallying because of dry conditions. In some of the northern Robusta regions of Brazil, at the same time we have something called the mealybug, which is eating some of the coffee cherries, as well.

Coffee prices start rallying from 115 up to 135, investors scramble to buy coffee and, low and behold, everyone’s worried about the weather again this year. 2016, Brazil is going to produce approximately 56 to 57 million bags, the largest crop ever in history, and we feel that October, November, and December of this year, prices will once again below the price that originally took place when the mealybug was announced and when dry conditions happened.

With coffee now rallying, approximately 135 to 140 per pound, we’re looking at call selling opportunities going forward. We’re looking at the December contract, we’re looking at 220, 230, and 240 dollars per pound strike prices, roughly double the price of coffee.

Coffee usually has its largest demand in the winter season, January, February, and March. A lot of consumers of coffee in the United States feel that they drink coffee daily year round, but actually we consume about 20% more coffee during the winter season, and then people go to summer drinks as it starts to warm in April and May.

During April and May is when Brazil starts harvesting their crop, and this year is expected to be a record. April and May is the time to be short coffee. We’re going to start doing that this coming week, and we expect coffee prices to be far below current levels where they are right now. Selling 220 and 230 coffee calls is going to look like a very good investment, I think, this fall. We expect coffee prices to be roughly half of what the strike prices are.

This is how you trade history, this is how you trade commodity options, and this is an opportunity to sell coffee calls in 2016. We expect this to be a great opportunity, and low hanging fruit, as we like to say.

Anyone wanting more information from OptionSellers.com can visit our website. We’d be happy to get something right out to you. Feel free to contact Rosie and she can set you up with your own account,(continued)

Good afternoon, this is James Cordier of OptionSellers.com with a market update for January 15, 2016. Michael Gross and I have written a few books, actually three different editions of the same book, The Complete Guide to Option Selling. On the very front of the book it talks about possible stellar returns in both Bull and Bear Markets. Well, we’ve done, in my opinion, quite well over the last several years where the stock market has been trading higher. I believe we were up six or seven years in a row, with the exception of 2015, where I think, the stock market was basically flat, possibly down 1%.

Going into 2016, we’re getting continuous calls from some of the largest investment banks in the world, saying that 2016 could be quite different from the previous several years. RBS, this past week, talked about a cataclysmic year in 2016, to actually say, “Get out of everything.” Have you ever noticed when investment banks and large stock brokerages are very slow to talk about the market possibly going into a down turn, they normally use a terminology like, “We’re going to have a great deal of movement, both up and down, lots of volatility.” But they never say the market’s going to fall. For the first time in several years, we’re getting large investment banks saying just that.

On the front cover of our book, possible stellar returns on Bull and Bear markets, it looks like in 2016, we’re going to implanting strategy for a Bear market. We do have the ability to go both ways – we also can be neutral. But, I think 2016 does look like a possible lower market as far equities go. Quite often you talk about and hear people discuss, “As January goes, so does the rest of the year.” I believe with two weeks into 2016, the U.S. stock market is down 8% already.

I know a lot of people listening to me right now, do have some stock holdings. I hope the market does rally. We’re going to possibly be positioning ourselves for a Bear market. However, what’s most interesting about selling options on commodities, it gives us the ability to diversify. The fact that we’ve got commodities trading at very low levels right now, does actually offer opportunity. Wrap your head around this: Commodities, some of the major commodities that have helped China grow over the last several years, and of course commodities that we use around the world, are sitting at twelve and thirteen year lows. What does that mean? A lot of these commodities are reaching levels that are required to pull them out of the ground or to produce them. That should hold many commodities from going too much lower.

On the other hand, we have a slowing economy, both in the Unites States, as well as other parts of the world. That should keep this market intact. Over the years, we would have people and investors talk to us, you know, “James what’s the next big move?” “What’s the next Bull market?” Or, if a market has rallied dramatically, “What’s a good market to shore?” This is interesting. In all the years I’ve been doing this, the most prominent way to make money selling options and commodities is to find commodities that are fairly valued.

If you have the ability to put short positions on a call, above a market, possible 50% to 60% north of where the commodity is trading, at the same time, selling options 40% below the current price, the ability to forecast and find fair value commodities is more valuable than finding the next commodity that is going to move 10% or 20% to the upside. The put is taking care of the call and the call is talking of the put while you wait several months for the market to stay inside that window. We feel that going forward, the landscape for commodities to stay almost in a neutral position for the next six to nine months is very high. That is the position we’re going to take on many commodities. I know a lot of our clients have witnessed that already and it looks as though 2016 will be ideal for that situation.

There are a cou(continued)

Michael: Hello readers and listeners, this is Michael Gross of optionsellers.com, I have a very special guest for you today. Today we have with us John “Dr. J” Najarian, for any of you that watch CNBC you’ll see Jon on Closing Bell and also as a feature trader on Half Time Report. He’s also co-author with his brother Pete of the book “How We Trade Options”, he’s co-founder of optionmonster.com and trademonster.com.

For those of you who don’t know John he was a floor trader at the CBOE for 23 years before founding these enterprises. For those of you that trade stock options, Jon has some deep insight into that form of trading he’s going to share with some of those with us today. John welcome to optionsellers.com, guest expert series.

John: Well it’s my pleasure Michael, thank you very much for having me.

Michael: Sure, John you’ve got a pretty rich background in the industry, one thing many of our listeners might not know is that your resume includes a job as a linebacker with the Chicago Bears. Can you tell us a little bit about that and how you got started with your career in trading?

John: Sure, well I was lucky enough back in 1981 to come out of college and go right to the Chicago Bears, and unfortunately even though I picked a good team I think too, – because I was a free agent, I was not drafted – so it was my choice because several teams had contacted me Michael, and the Bears looked like they were probably my best chance.

So I went there but unfortunately Michael Singletary ended up being a number two pick that year and obviously a future Hall-of-Famer, it was not long before they figured out that they’d rather have him at middle linebacker than me. So at least it got me to Chicago and that’s what I always thank Mike Singletary about.

Michael: That’s some pretty tough competition.

John: Yup it is, and he’s a really tough guy and a good guy, so my mother is the only one that resents him. I instead admire him, and I'm sure if my mom had met him she’d admire him too.

Michael: Okay, so you were in Chicago and then you ended up on the floor of the CBOE, can you tell us how that got started and what you did there?

John: Sure, basically my agent was a trader and a money manager, and he was on the floor of the Chicago Board Option Exchange, managing money for clients. And when he asked me what I was going to do, and I told him that I thought I’d go into the markets, from being around so many interesting people up at our training camp.

Bears training camp at that time was up at Lake Forrest, a suburb on the northern edge of Chicago. So he said “well if you’re even interested in that, you’d much rather be on the floor John, trust me”, so he gave me a job and I did that with him for about six months and worked with another trader for about six months, and then went off and started trading my own money out on the floor.

Michael: Wow that’s a great story, now when you first started trading Jon, were you trading options, were you trading or were you selling options, were you buying options, what type of trading were you doing?

John: Basically as a market maker, so I would have to do both, buy and sell, but I was primarily I guess a premium buyer. Because most traders you will find that are on the floor end up having long premium positions I think, but the primary reason is that they’re scalping throughout the trading day.

In other words that long gamut, the fact that you’re long on option contracts, and that it gets longer as it goes higher, and shorter as you go down, means that scalping can be a very lucrative way to make a living. So basically scalping gamma is what most traders do, and obviously the further you get from the trading floor, the more it favors the strategy like what you guys do where you’re and options seller rather than an options buyer.

Because a combination of people just don’t have a full time access to the markets like a floor trader does, and the time decay can just eat you (continued)

Michael Gross: Okay, to everybody listening to today's Option Seller's Guest Series, we have a very special guest for you today. I am speaking with Dr. Alexander Elder. For those of you who may not be familiar with Dr. Elder, you should be. He is a legend in the trading world. He has two classic books: "At Least Trading for a Living" and "Come into my Trading Room", which I feel should be staples of anybody who's considering becoming a serious trader. Dr. Elder, welcome to the show today! Dr. Elder: Thank you very much! Pleasure being here. Gross: Dr. Elder, we're going to start. Obviously, our readers and listeners here sell options: some of them sell index options; some of them sell stock options. Obviously, here we talk about selling commodities options but I think it might be interesting to a lot of our listeners and readers to hear your story. You have a very interesting story about how you got to this country and how you got started in trading and I wonder if you wouldn't mind sharing that. Dr. Elder: Well... I was born. Sometimes people ask me, "Where are you from?" I say, "I was born in a non-existent country. I was born in the Union of the Soviet Socialist Republic." To make a very long story very short, I early on developed a massive hatred of the Soviet system. And I got involved in politics, which was a dangerous business in the old country. And eventually, I realized I didn't want to go to a Soviet prison so I got a job on a ship and I jumped ship in Africa. I came to the United States. The embassy people – the US embassy people - flew me from Africa to New York. I came to New York with 20 dollars - 18 dollars to my name. And that was my arrival here. I worked. I took all kinds of exams because back in the old country, I went to medical school, actually graduated medical school, and got my MD at a tender age of 22. So I reconfirmed my diplomas here. I did my residency in New York and got a teaching position at Columbia University. So while all of that was going on, I'm generally a very curious person. I want to know about different things, and I found such a thing called the stock market. Well, that just sounded so exciting. I started reading books and I started gambling. I mean, of course, I didn't think of it as gambling at that time but gambling it was. And I had a tiny account, you know - 5000-dollar account. I would run it into the ground, make some more money, open another tiny account, run it into the ground and eventually I learned enough that I stopped running it into the ground. Now, took me years, took me years to overcome that obstacle. And to this day, I'm saying to people that a higher degree of formal education is an obstacle to successful training. The higher your formal education, the more difficult it's going to be for you to learn how to trade - and there's a very good reason for that. But once I figured out the game, once I began trading properly, I realized that there hasn't been a book that properly explained everything I needed. And I wrote a book, I wrote a book that was basically a book I wish I could have bought 5 years earlier. And that was "Trading for a Living". It became a huge best seller, an international best-seller translated into 14 languages and still a best-seller in the US for over 20 years. Just last year 2014, I produced a new edition of this book. The publisher was begging for a new edition for ages and I said, Well, I allocated three months to do a new edition. Well, it took me 18 months instead of three. I really completely rewrote the book. And so that's my book the new "Trading for a Living. That's... As far as for myself, I trade. I trade professionally. I spend a fair bit of time in front of the screen, mostly trading stocks and commodities. And I also love teaching. Whenever a company invites me to speak somewhere and pay for it, I am happy to get on a plane. I just came back from Asia. I was teaching almost a week-long course in Macau near Hong Kong. And (continued)

Hi. This is Michael Gross co-author of “McGraw-Hill’s The Complete To Option Selling” and Director Of Research here at OptionSellers.com. I’m here with your bi-monthly video lesson. The topic of this week’s lesson is Avoiding The Big Hit. This is a great subject to talk about. Recently, we’ve seen some extreme volatility in the stock market. A lot of investors that I’ve spoken to over the last couple of months have expressed concern about those moves in the stock market and start thinking about big hits to their portfolio. So, they’re looking at other investments. They start looking at commodity option selling. One of the top questions is, “That sounds great but, how do I avoid that one big hit that comes along and takes all my profits from the last three months?” That’s always been the knock on option selling is, yes, it can be good, it can be great and then, one bad month and you’re all back to square one because you can lose it all in one shot. It doesn’t have to be that way. We’re going to talk about that. How you avoid those big hits and just keep your steady premium collection going. So, rather than having six steps forward and then one huge step back, we want to keep it going six steps forward, one step back, and then another six steps forward. That’s how build a consistently producing option selling portfolio.

Before we get started, I do want to mention if you would like to learn more risk management option selling or option selling in general, how to build a consistent option selling portfolio, I do recommend “The Complete Guide To Option Selling”. It’s just recently out in its new third edition. You can get it on our website at a 40% discount off the cover price. That’s OptionSellers.com\book.

So let’s talk about avoiding the big hit. First of all, I want to talk about why it’s been on everyone’s mind more lately. This is why it’s been on everyone’s mind more lately. That’s my rendition of the stock market and the way it’s been moving. Depending on when you’re watching this, and we have rebounds, the point is we’ve had some extreme volatility as of late and, a lot of the people that watch these videos and subscribe to our newsletter, etc., they trade index options. They trade either stock options or index options. Trading index options is great. You can apply a lot of the same concepts as commodities but a lot of the guys that trade index options, that’s all they do. So, they only have one asset class in one market to trade. That’s great because you can sell puts all the way up and you’re making money and that can be a great strategy for three, six, twelve months – it’s the greatest thing in the world until this happens. Then what? You’re all in one market. All your option sales, and I don’t care if you’re trading the S&P, or you’re trading the Russell, even the Q’s, you’re really all in stocks. So, this is an undiversified type of portfolio and no matter how you’re trading the S&P, this is saying, “Well, yes, but I sell Calls.” Well, that’s great, but you’re still in one market. So, the thing goes screaming up, you’re going to lose in the Calls. It’s not a diversified portfolio. Great strategy. I don’t not recommend it as part of an overall investment plan but, if you have a lot your capital just riding in the S&P and selling S&P options, you have some exposure there.

So, what’s one way to avoid the big hit? Well, one way is to get diversified in your option selling. The one asset class to that with, the primary asset class you can do that with, if you’re already selling options in stocks or indexes, is of course in commodities. So, one way to avoid the big hit, you get diversified in the commodities. These are all preliminaries. I want to get to my main point here in just a second. So, you get diversified. You’re out of equities, something does blow up in equities, you’re over here in commodities, which move to the beat of their own drummer, for the most part. (continued)

Hi this is Michael Gross, Co-author of McGraw Hills “The Complete Guide to Option Selling” and Director of research here at optionsellers.com. I'm here with your bi-monthly option seller video lesson. The topic of this week's lesson is The Margin Cushion.

You know I talked to a lot of prospective investors here at our firm and one of the top questions I get is:

• How are you going to protect my money?

• How are you going to protect me from downside risk? There is a lot of risk in option selling

• How do I avoid that?

• How do I stay away from losing money?

And there's a couple answers to that question but one of the primary answers is option selling is no different than any other investment, in that you can lose money in it; look we're all adults here you're going to have losing traits. Option Selling is not perfect; we think it's a superior strategy but it's not perfect and if you're going to be an option seller you're going to have to accept the fact that sometimes trades are going to lose money, sometimes your account's going to lose money. The key is when you do lose money you lose it the right way, you lose it in a limited way, you lose it in a controlled way that enables you or puts you in a position to be able to bounce back next week, recoup the losses next month or even in some cases next year, but you want to keep that in a controlled capacity, keep you in the game and puts you in a position to make the money back in the future time and how we do that is with systems.

Risk management systems all the way along, that's what separates an amateur from a professional or sophisticated investor is those systems. One of the systems we're going to talk about today is the margin cushion and this is a very crucial risk management system; if you want to be a successful option seller you need to understand the concept, that's why we're going to talk about it today.

Before I go any further, if you'd like to learn more about concepts like this, about risk management systems or option selling in general - how to be successful, you'll learn a whole plan for how to be a successful option seller in the complete guide to option selling. It is on sale now at our website www.optionsellers.com/book you could get it...if you buy it through our website you get a 40% discount off the cover price where you get it at Amazon or anywhere else. So what is the margin cushion? Well before we talk about what a margin cushion we're going to talk about why you need it.

As an option seller you have two types of risk; there are two types of primary risk that you're going to have to deal with in the market:

The first one is that your option goes in the money.

Now this is something that Stock Option sellers deal with a lot and in some cases it's what they want, if they sell or put underneath the market and price of the stock goes down and they get that stock put to them sometimes that's what they want because of trying to buy the stock at a cheaper level. Same thing if we are selling a call above the market, the market goes up, it takes them out of the profit so that it's not all bad thing if you're a stock option seller. For commodity option seller who are just selling for premium, you don't want the option going in the money because when an option goes in the money it's value starts increasing rapidly, we want to avoid that, fortunately if you're using the method we subscribe to and we prescribed in our book and our other materials, the FUDOM method that's not a concern. Why because your selling option so far out of the money that... the chances of them going in the money are remote at best, not only that but you can see them approaching that strike place so there's plenty of time to get out of the option in almost every case, long before it ever goes in the money.

So that's not a big concern if you're selling commodity options using the FUDOM method. Your primary concern is the second form of risk we are goin(continued)

November 25, 2015 Update

James Cordier Market Update

Good afternoon. This is James Cordier of OptionSellers.com with a market update for November 25th. Quite often, as we’re approaching the last month of year as we are now, many fund managers are starting to consider where are they going to go on vacation and what beautiful island they are going to spend some time on. To either going to lick their wounds or celebrate the last six months. I’d be lying if I didn’t say I wasn’t thinking about the say. However, going into December right now, we have some surprisingly large about of low hanging fruit. Anyone who has listened to me before, that means we’re looking at opportunities. Several of them are coming up in December.

The crude oil market is getting very interesting, trading in the mid-upper 40’s – recently, as some of the turmoil in the Middle East. Michael Gross and I have written many books and many different chapters, I’m Getting To The Party Late. And what does that mean? That means that a market that has been sanguine like oil has around the $45 level – it starts moving to the upside or slightly to the downside as we make a seasonal low in December.

Volatility increases, and even if you’re not exactly in the market at the lull, volatility does push up even put premium levels. Something we’ve just been observing just in the day or two as some of the Middle East headlines have been coming across the wire. Quite often, a market that starts its move actually increases its volatility, and a person actually gets to sell puts or calls in this case – puts in the oil market – at a higher level than the market was trading at when crude oil prices were actually lower. Something we’re really looking forward to in the next two to four weeks in the crude oil market.

We’re looking at selling July, August, and September crude oil puts in the $30 level. Anyone who has been following the crude oil market for a long time knows that it often falls in November and December. And low and behold the driving season the next year is quite a bit higher. That’s our favorite trading coming up now. The second market that we’re following extremely close right now is the coffee market. In October and November is flowering season. Quite often what happens in Brazil, the largest producer in the world, weather starts shifting from west to east. While it starts changing from south to north, it normally is dry. In many of the growing regions, in Brazil, that has happened. That scared the market slightly because there were some dry conditions in coffee growing regions, and that is now developing from south to north – that’s when precipitation does start to come in to that area. It started just recently. A lot of concerns about the market abound about dry conditions in Brazilian growing regions has put and call premiums extremely high.

Coffee right now trading around $1.25 to $1.30 a pound has a chance to maybe rally ten cents in the coming weeks going into December. However, the rains that are materializing tell us that Brazil is going to produce approximately 60 million bags in 2016, the largest crop ever. And when we have supplies like that, prices don’t double. Were looking at coffee calls around $2.80 to $3.00. We’re going to be putting on our tuxedo and jumping into that position in a big way in the next two to four weeks.

One other market that we’re following closely also is soybeans. A seasonal low normally takes place in December and January. The one thing that China still does need is that it is feeding their ever-expanding middle class. That does not require copper but it does require protein. We love the idea of getting along soybeans at very extremely depressed levels. We’re going to be doing that in the next thirty to sixty days as well.

Anyone wanting more information from OptionSellers.com can visit our website, or if you’d like to have your own account, feel free to contact our office – speak to David, R(continued)

Good afternoon. This is James Cordier of OptionSellers.com with a market update for November 9th. My goodness it’s almost Thanksgiving; just a couple of weeks away. Where did the year go? I think everyone says that and I’m saying that as well.

Last time we chatted, we were talking about precious metals and non-precious metals. They were involved with a rally. The market was pushing up higher. Gold and silver actually reached levels that would have put them net positive for the year of 2015. We speculated that the rally was short lived, and as a matter of fact, it turns out that it was. It seems as though ever time commodities rally just a little bit, high frequency trading, which takes place in stocks and commodities as well, seem to want to push the market higher.

What continues to happen is the fundaments simply aren’t quite there yet. Many investors are looking at the idea that both Asia and Europe will start catching up to the United States, and demand for raw products will start to increase. I think we’re getting close to that. Seasonally, energies of course are very slack in the fourth quarter. We’re well into that with now with November and December not that far off. Energy prices normally hit their yearly low during this time frame. Simple reasons why: Refineries close down for maintenance, and demand for oil, especially in the United States, is at it’s lowest point in October, November and December.

Precious metals aren’t ready to rally just yet. Neither is the copper market. Neither is steel, zinc, or iron ore. But maybe we’re getting a little closer. We’ve been under the influence and the idea that energy prices meandering around $45 per barrel. Interest rates around the world are absolutely on steroids trying to inject more strength into the global economy around the world.

This will take place and this will take effect. It’s anyone’s guess right now whether the global economy starts to strengthen in the first quarter of next year. We’re guessing the first or second quarter of 2016 that we’ll see a turn-around in Europe and in Asia, and we do see a demand for commodities then finally taking place.

We feel the first commodity to take advantage of for this rally will be crude oil. Right now the marketing is trading right below $45. We’ve rallied a couple of times in the last six months only to have supplies knock it back down. That has happened yet again. We will be using weakness in oil over the next six to eight weeks to position ourselves for a bullish move in May, June and July of 2016. We’re looking forward to selling crude oil puts around the $28-32 level. We’re going to waiting into these slowly. We started just recently and we’re going to use weakness in November and December to establish that position.

We think that crude oil prices in May, June and July of 2016 will likely be in the $60 range, and if we’re long at 30, that is something we certainly like. This is what we discuss and talk about as low hanging fruit. Shortly after this we think the copper market will start coming up. We think iron ore prices have probably bottomed. We see China and Chinese demand for these raw commodities finally picking up somewhere between the first quarter and second quarter of 2016.

What prices normally do is they anticipate this and prices start heading up before then. We will be participating in those rallies as we expect after the crude oil, and we’re looking at getting into those markets right now. Anyone wanting more information from OptionSellers.com can visit our website of course. Or you can now feel free to contact our office and we’d be happy to set you up with a client account of your own. Thank you very much and we look forward to chatting with you in two weeks.

Hi, this is Michael Gross of OptionSellers.com and welcome to the first installment of Option Seller radio. I’m here with James Cordier, head trader here at OptionSellers.com and we’re going to talk a little bit about the markets today and a little bit about option selling and some things that you may be able to look at and study to learn more about this strategy. James.

James Cordier:

I’m doing great. As always, we’re watching the news and watching certain market conditions fluctuate. And Michael as you know, I think as the year wraps up as we are doing now, we’re just about going into December, lots in the news, lots in commodities, and certainly opportunities that we like positioning for, for the coming year.

Michael Gross:

Good, good. Yeah I think a lot of the people listening out there probably, maybe you’ve read our newsletter, you’ve read our book, you’ve looked at our website; the purpose that we want for this radio show is to really tie a lot of those things together for you and maybe give you some additional avenues if you are looking to learn more about this or just keep posted on what’s going on in the commodities markets and see some examples of how you could be selling options on some of these markets. James, I know one of the big markets we’ve been watching lately is the crude oil market and you were on CNBC last month talking about a potential major low in the market and I know we featured it in our newsletter in November as well; what are your views on crude oil right now?

James Cordier:

The crude oil market is absolutely over supplied as everyone hears about and everyone’s talking about here in the United States we have nearly 100 million barrels over the five year average. We have OPEC trying to fight for market share; it’s going to rebound as far as what OPEC is wanting to do and willing to do, I think, in the next several weeks. Right now, here in the United States, we have real decay in energy financing, practical a third of the companies are basically going out of business as a lot of the infrastructure spending that took place during the boom years in the United States when oil was pushing $90.00 and $95.00 a barrel. A lot of that infrastructure spending is now in place and unfortunately, it was financed. It looked great on paper and now with oil trading in the mid to upper 40’s, it just doesn’t work right now and a lot of the funding that took place right now is leaving that industry; the Bakken especially some of the states North Dakota and such that looked like just a great investment is looking like a terrible investment right now. We think that in the coming weeks or months, certainly Michael, we are going to see US production fall off dramatically and certainly that was OPEC’s idea. They didn’t like seeing the United States go from five million barrels a day to ten million barrels a day, that’s the golden goose that, especially the Saudi Arabia’s of the World have been enjoying for so long. We see that a monumental shift coming. I don’t know if it’s this go around where oil is, you know, near $40.00 recently. Maybe it takes place winter when oil sinks again, but we’re certainly in the process of getting some of the new producers out of the market and at which point you’ll see OPEC then finally cut production and we could see quite a rebound in the next six to twelve months, I think.

Michael Gross:

Yeah that was, you had some great points in the newsletter as well. Even though prices have been so low and production’s been so high, demand has been increasing. It’s kind of a function of low prices carrying low prices where the lower price is spurring demand, maybe not so noticeable because supply has been so high. But if they do start cutting back that production, they will be dealing with increased demand. We have a good seasonal in crude oil right now too, for those of you who follow some of the seasonal charts we talk about; what’s behind this seasonal, James, as far as (continued)