Energies
After just barely penetrating the $100 mark crude oil has setup a bearish pattern that could have some legs to it. While it is logical to think that $100 was psychological and not a rational long-term price top, keep in mind that much of the last $30 run-up has been lacking fundamental support. Market hysteria, fund interest and spec buying have all helped to bring oil prices way out of proportion with supply and demand fundamentals. So it would seem only logical that a psychological resistance point would actually cause a trend reversal. I would look at some long-term put plays and get on the short side in a hurry. If we break back to new highs, then leave some powder dry to double up because it is not a matter of if, but a matter of when, this market will go adios ga-bye-bye to the downside.

Financials
Economic fears and a doom and gloom speech by Fed Chairman Ben Bernanke has the stock market in a bit of tailspin. I expect some upside this upcoming week and a bit of rebound before heading south once again. Bonds are unlikely to break through the 120 mark and a worthwhile contrarian put play over the next couple of months. Bernanke's comments along with the UK and ECB's surprise decision to leave rates unchanged should have rocked the dollar south. The relative stability seen following Bernanke's comments shows that the dollar is ready to truly bottom out and begin its run up for 2008. I would get short the euro and pound. The Canadian, yen and Aussie dollar are also solid long-term short plays.

Grains
An explosive move in grains on Friday came as a bullish reaction to the grain stocks and WASDE reports. However, if you break the report down by market you get a bit of different view than the frenzied lock limit moves on Friday.

Corn is definitely a shocker with a more than 20% drop in US 07/08 ending stocks estimate by the USDA and a nearly 8% drop in world ending stocks. This market has been held back when compared to the moves made by beans and wheat, mainly due to the strong planted acreage seen in the U.S. However, the strong global demand driven by proportionately higher wheat and bean prices, has eaten away at that supply at an unexpectedly fast rate.

Soybeans got a mildly bullish report, but when you are running for the teens who cares about a little here or there? There is a major shortage and spiking demand for beans, and it is justified in reacting with this kind of bullish move.

Wheat got a bearish stocks report but a shocker in the forecast for 2008 plantings, suggesting a long-term supply in a market with no inventory to speak of. Bottom line is this market took a minute to figure it out, but there will be a lot to be worried about in this market over the next 6-8 months.

So what does this all mean to my forecast for a snapback in grain prices? It means a great entry point! The news is out and the prices are forcing extreme short covering. Throw in some expanding volatility and we are very close to the top. Long-term bear put spreads offer a solid approach for a few reasons:

1) If the entry timing is off we can buy back the short side at a profit. This basically gives us two chances to be a good timer.

2) While premiums remain high in grain options, spreading the bear side allows us to offset some of the excess premium with a short put option sale

3) These are buy and hold positions. Look at May spreads and be patient. We would go about 10-15% away from the market and wait it out. When it falls, it will fall hard and fast and we won't get stopped out or see massive swings in the spread value - unless of course it goes our way!

Meats
A massive trend reversal in cattle has the market seeing its biggest two week move in 6 months. Bottom line here is that I am a perm-a-bear that takes one look at the technicals and say it's a market to buy with futures with stops below 88. Weekly trend line support and a bull consolidation pattern says this might be another bear fake out, but I will wait for the break below 88 to get into this market short.

Hogs remain a value buy with calls despite forecasts for heavy supply in 2008. Demand is strong and this market is unlikely to falter much further.

Metals
Gold surged on interest rate issues and dollar weakness, but this is an excellent entry to a bear play in the metals. I would buy puts or put spreads in gold and silver, and if I have the chip stack look at ratio credit call spreads in silver. Copper and platinum remain long-term shorts.

Softs
Coffee is chopping around despite setting fresh near-term highs every few days. This market is ready to explode from a possible 2008 reversal in the Brazilian Real, a drought causing late flowering with a setup for a bad critical crop year in Brazil, rotten crops in Vietnam and a crop hit in Kenya. I see bull call spreads as highly attractive. Cocoa remains strong as politics and supply issues make this market set to run to 2400.

Cotton is all over the map, but a positive reaction to the crop report gave the market a limit up move on Friday's close. I look for expanded volatility next week and a run to 74 if we get a positive close on Monday. OJ is getting clobbered after a failed frost frenzy and a flat cold storage report. I expect a rise in OJ through March and to pick up some discounted calls to play the volatility to the upside.

Sugar is catching a bid as the European Union cuts sugar prices as they abide by the WTO ruling that their pricing practices are illegal. This is going to cut down future harvests dramatically as farmers will not have the same motivation. The stocks report was fairly bullish as well. However, the market's technical action this week sets up a bull trap and a bear move in coming weeks so I would bail out on longs, take the profits and pick up some cheap puts for a pullback. When we get back to 1085 I would start scooping up some calls and take the profits on the puts.

James Mound is the head analyst for www.MoundReport.com, and author of the commodity book 7 Secrets. For a free email subscription to James Mound's Weekend Commodities Review and Trade of the Month, click here.