The U.S. dollar has been gaining a bit of ground this past month after a prolonged bear market trend. But is this really a trend change? You can use options to trade your view, and I think there are some strategies with good risk-reward right now you can pursue in the U.S. Dollar Index.

Volatility is having a huge impact on many markets. No one has ever seen anything like this. I don?t want to get into details of why this extreme volatility exists except to point out that it does exist, it has been here for a while and probably won?t go away anytime in the near future.

The stage was set for stocks to rally in early May after the Federal Reserve suggested at its April 29-30 policy meeting that the easing cycle that began after last summer?s subprime loan crisis may come to end, or at least, take a pause. The major stock market averages have been gaining lost ground on ideas the economy should start to recover. The Fed may have to turn to fighting inflation, which is putting a damper on consumer pocketbooks and the economic outlook. We?ve all seen the headlines about soaring food and fuel prices. I?ll take a look at a number of markets including stocks, bonds, the U.S. dollar, and crude oil. I?ll share where I think the markets may be headed this month, and offer some key technical levels I?m watching.

Crude oil for June delivery jumped to a new record high, above $122 on Tuesday, May 6, 2008. The spike in price was spurred by supply disruptions in Nigeria and growing demand from India and China. It also didn?t help that a new prediction was made by Goldman Sachs forecasting prices to rise to $150 to $200 within two years. Are these prices justified in crude and other energy markets?

Using options, you can develop a risk management strategy. I am going to look a specific strategy that involves selling a covered call that can be used in the July corn futures market with a medium/long-term timeframe.