Energy Complex (NYMEX)
Crude Oil:

Crude Oil rocketed up to $90.00 last week. We are seeing early signs of a pullback this week. We expect Dec. futures to pull back to the lower 80's this week. Strong support lies at about 77.50 on the Dec. contract. Fear of a global economic slowdown is being blamed for this pullback. We continue to see a strong up trend in crude and will therefore look to buy this and any other significant dip we see. We would prefer to buy long at or below $80.

Natural gas:

Natural gas is still stuck in its well established range between roughly 7.50 and 6.50. We see this market as being generally undervalued and therefore favor long signals over short. We are buyers below 7.00 with stops below 6.21.

Equities
SP500, DJIA, NASDAQ:

Last week we mentioned that we expected the S&P 500 testing support near 1525. Well as you know, we saw that level tested and then some on Friday. We remain very defensive at this time and do expect significant downside follow-through in the weeks and months ahead. This is NOT another dip you should buy. It may turn out to be a good dip to buy in a few days or weeks but at this time there is far too much uncertainty to warrant new longs. We continue to encourage readers to buy puts and or use trailing stops on all long trades. This country's financial house is so badly out of order that no amount of spin, FOMC rate cuts, window dressing, or even outright lying can keep this sinking ship floating for much longer. The time to jump ship is not after it has gone under but now while it is still floating!

Financials
U.S Bonds:

Last week we mentioned that we had been targeting a move to 108. We have since then reversed our outlook as many analyst have in the past week due to the horrible data we saw last week. At this time it looks as if the FOMC will in fact be forced to cut rates next week and we therefore see bonds testing at least the old highs above 114.

Metals
Gold, Silver, Copper:

After last week's G7 meeting we are finally seeing the dollar strength I had been forecasting. We should see gold fall back below 725 this week and silver should push back below 13.00. We could see even more downside than these targets, but it is too early to tell at this time. Either way, we would see longs exit and shorts enter these markets this week. Looking longer term we will buy this dip when the time and price is right but we do not expect that time to be for another 2-4 weeks at the earliest. Last week I mentioned that Palladium was a sell and it remains so this week as well.

Grain Complex
Corn, Soybeans, Wheat:

We are reading the daily wheat chart as a potential head and shoulders top formation. This formation would be confirmed if the December futures price trades below 8.00. Corn is still a sideways market at best, as far as we are concerned. Corn would need to trade above 3.90 to really attract new buyers. If it fails to do that, look for it to fall back below 3.25 before Thanksgiving. Soybeans continue to look the strongest in the near term and we are buying any major dips while targeting a move back up over $10.00 in the not too distant future.

Softs (NYBOT)
O.J, Cocoa, Coffee, Sugar, & Cotton:

OJ has begun to pull back after last week's short squeeze. We still favor the downside and expect to see the price fall all the way to 1.25 or lower by Thanksgiving. Cocoa is still trying to consolidate the recent sell-off and until it completes that, we will stand aside. Coffee is still reeling from the huge sell off, but we will become buyers on a move below 120 with stops below 115. Sugar staged a bit of a rally last week but fell short of breaking the old highs. We expect 10.25 to be solid resistance. Frankly we see both down and upside as limited and here too we are standing aside for the time being. Cotton is still trying to get a rally going but we are still reading the daily charts as a double top and therefore we are not chasing this market higher. We feel that longer term we will see much higher prices but near term we see cotton as being vulnerable to a liquidation back below 60 cents.

Meats
Lean Hogs, Live/Feeder Cattle, Bellies:

Live cattle traded sideways this past week but we still see more downside in the near term. We are targeting a move to 95 on the December contract. Feeder cattle hit our target at 111 from last week's issue and remain a sell, though at this time I urge you to move your stops to at least 113. We could see this market fall all the way to 108 before this trend stalls. Our hogs trade was stopped out and at this time we are standing aside in this market. We do have strong buy signals but until the market confirms these signals by turning up, we will wait patiently. Bellies also stopped us out and here too we will wait patiently on the sidelines for a long trade to develop.

Derek Frey is Head Trader at Odom & Frey Futures & Options.

Risk Disclaimer
Past performance is not indicative of future results. Trading futures and options is not suitable for everyone. There is a substantial risk of loss in trading futures and options.