Prospective Commodity Trade For The Week of January 21, 2007

The commodity markets, or at least the markets I am most closely watching, seem to be stuck in the trading ranges they’ve been in the past several weeks. but three of these commodities look like they are poised to break out of their formations. Following is a summary of what I see happening in those markets.

The March US Dollar Index: The March 2007 US Dollar Index (USDI) looks like it’s about to break out of a cup with handle formation. A close of the USDI above 85.15 would verify this breakout. If the Trend Seeker trend is still Up when this breakout occurs, then I would buy a March 2007 86 call option which today settled at $220. This option expires on March 9. I look for an upside target in the USDI of 87.

May Sugar:: If May 2007 Sugar closes below the 52 week low of 10.81, and Trend Seeker rating is still down, then I would buy 1 May 2007 9.75 put option which today settled at $190.40. These options expire on

April 13, 2007. I look for an initial downside target in May Sugar if the breakout occurs of 9.75.

May Coffee:: Coffee has been in a large sideways channel or trading range since early November. If May 2007 Coffee closes below 118, which will verify a break out and down out of the channel or range, then I will buy 1 May 100 Coffee put option if the Trend Seeker rating is still down. May options expire April 13, 2007. If this breakout occurs, I look for Coffee to make a move down to support at 105. The May 100 puts closed today at $150.

For a summary of my completed 2006 trade and currently open trades, please go to my website, www.mylearn2trade.com.