Today the market traded in a $2.62 range between $57.72 and $55.10 only to close 22 cents lower at $56.09 because the market, on an intra-day basis, has no directions. Other than the geopolitical tensions--today it was Belarus--and the OPEC jawboning that the Jan. 6 commentary already discussed, the only new material information appearing today is the CFTC's COT report. The COT report reflects the market sentiment that displays a serious warning to anyone who dares to be long in the crude oil market because it shows that during the week from Dec. 26 to Jan. 3 in which the market dropped $2.78 to close at $58.32, the non-commercial longs have shrunk by 17,654 contracts to just 2,194 contracts amidst aggressive new shorts coming in as open interest increased by 46,748 contracts. The market has since dropped by another $2.23 to close today at $56.09. It is a fairly accurate statement to say that by the end of today the non-commercial interests are net short. Today the market tried to break $55.00 support, but it seems that all the longs that should have been out have already been flushed out after last Wed.'s $58.32 closing, and all the shorts that should have been in have already jumped in the bandwagon since the market broke $60.00 support last Wed., so no new shorts were coming in as the market approached $55.00. Therefore, the market held firm at $55.10 and closed nearly $1.00 higher at $56.09. The front-month crude oil contract held above $57.30 in the entire month of October except on the date of expiration on Oct. 20. Therefore, $57.30-$57.50 was an important support and is now a resistance. The market now needs to close above $57.50 in order to rally back to $60.00. Tomorrow the market will again under pressure for two reasons. First, gasoline and distillate inventories are expected to build in Wed.'s DOE report. Also, the EIA's Short-term Energy Outlook will likely lower its estimate of the 1Q WTI price and of the distillate oil demand due the record-setting warmth so far this winter. Strategy: Hold long at $55.70 with a stop at $54.40; take profit above $59.50. Dr. Chen P.S. If you wish to have a further discussion on my crude oil market analysis, please visit my blog at http://energyfutures.blogspot.com.