Commodity Update For July 31, 2007-Still Watching December Corn!

I wrote on July 18, that I thought there was a distinct possibility that December Corn could go down to 300. I still think that, and, in fact, December Corn may even test its support level at 280.

Since July 17, December Corn has formed a small channel. The top of the channel is 347 cents. The bottom of the channel is 324.4 cents. Now, also, just below the bottom of this channel there are three support levels. There is some support around the 317 level.There is also support at 300 and support at 280. Now, these three different levels of support offer a good possibility of a profitable trade using multiple options. As of this writing, July 31, the December 300 puts are only 4 cents or $200.00. The trading plan is if December Corn closes below the bottom of the channel at 324.4 cents, then I plan to buy 2 December Corn 300 puts. I plan on selling one of the options when the first target, 317, is hit. Then, I'll plan on holding the other option to see if the market can go all the way down to the 280 support level. This trade has a profit potential of approximately $1000.00. The options expire on November 20 so there is plenty of time for this scenario to play out.

To take a look at all of my completed trades, please go to www.mylearn2trade.com.