As the New Year approaches the typical topic of discussion is to prognosticate, predict, and further espouse a view of what the future will bring. Our view is not a pretty view, well, certainly not in the short-term, but a view that becomes somewhat less gloomy as the year 2008 progresses.

March coffee futures are in a six-week-old uptrend on the daily bar chart and hit a fresh nine-week high of 136.00 cents on Wednesday. Coffee bulls do have upside near-term technical momentum and are looking for more on the upside in the near term. See, too, that the shorter-term moving averages I follow (9- and 18-day) are in a bullish mode as the 9-day is above the 18-day moving average.

The Brazilian Mercantile & Futures Exchange-BM&F SA ended its Initial Public Offering (IPO) process with the participation of 260,946 investors. All of the 299,184,846 common shares offered to the market were sold. This figure includes 39.02 million common shares to cover over-allotments. The IPO generated BRL5.983 billion, absorbed in its totality by the selling shareholders. A total of 253,707 individual investors participated in the IPO, acquiring 28.56 million shares. The greatest volume of shares - 231.43 million - was purchased by 806 qualified institutional buyers. The end of the IPO process resulted in a free float of 33.2% of BM&F's common shares.

On Friday December 14, 2007 ICE Futures US, announced that the open-out-cry markets, for all but a hand full of futures contracts, will end removing the trades to cyber-space. Yes, options will continue to trade on the floor in open-out-cry, but futures will be gone from the pits. While we understand the expense involved with the support of an open-out-cry market, we also know full well, that in times of market disruptions, the open-out-cry market is the only market that can fairly disseminate prices. When cyber-space fails the open-out-cry market survives. This unanimous action by the ICE Futures US board in closing these vital markets is a mistake that will come to light during a crisis.

Last weeks FOMC report came out within the expectations. As we forecasted, it turned out to be good for the Dollar. We have now seen significant moves in the Dollar against all of the majors. This Week we are expecting a small near term pullback in the Dollar which we will use to add to our long Dollar positions against the Pound, Euro and Swiss. We see the overall Dollar strength playing itself out sometime early in the New Year, so do not look to hold any of these trades for the longer term. Keep in mind that liquidity will fall almost daily until after January 3rd so many of the moves we see between now and then will be exaggerated.

January crude oil futures on Thursday hit a fresh six-week low and traded below $86.00 a barrel. The market has taken a haircut to the tune of around $14.00 a barrel from the all-time high above $99.00 scored a couple weeks ago. Serious near-term technical damage has been inflicted to suggest that at least a near-term top is in place. See on the daily bar chart for January crude oil that uptrend lines have been penetrated on the downside. Also, see at the bottom of the chart that the Moving Average Convergence Divergence (MACD) indicator is in a bearish mode as both the thick blue MACD line and the thin red "trigger" line have been trending lower for the past month. Both lines are poised to move into bearish territory below the horizontal "zero" line.

The U.S. dollar index is an excellent barometer for monitoring the overall health of the U.S. dollar as it trades against the other major currencies. The March dollar index futures hit a fresh all-time low last month, and a downtrend line is still in place on the daily bar chart. See on the daily bar chart that just recently the dollar index has produced a short-covering bounce that has seen prices challenge the downtrend line, but so far fail to push above it. A solid push above strong technical trendline resistance that is now located at the 76.00 level, basis the March U.S. dollar index, would provide the bulls with fresh upside technical momentum to begin to suggest that a near-term market bottom is in place.

The volatility in the commodity markets has been tremendous and in my opinion can be traced to several factors. These factors include such items as high energy prices, the ongoing mortgage debacle and ensuing credit crunch, the possibility of future rate cuts, and geo-political tensions, just to name a few. These have all combined in some sort to keep pressure on the U.S Dollar. Recently the crude oil futures looked certain to trade $100.00 per barrel and Gold was on its way to $900 per ounce, however both markets have since pulled back.