Energies
Energy volatility persisted this week as Katrina made her presence known in Florida as it built in strength to head into the Gulf over the weekend.  The end of day selloff came as the market should have been short covering heading into a weekend of major concern.  I suppose the question wasn't whether they needed to cover shorts, but rather how much of the potential damage was built in and holding up the energy market and also whether short covering is meaningful in a market that sets fresh all time highs every other day.  Natural gas has strong and psychologically significant resistance at 10, but one should leave a wide protective stop on any shorts at around 1022 to avoid intraday volatility purging that price point. 

Financials
Strength in energies helped a weak stock market continue its slide as major supports were left in the dust this week.  While I anticipate choppiness, there appears to be more downside left.  I am half out of my shorts, and would reenter on a bounce to 1220-1225.  Remember the whole reason I recommended shorts below 1250 was because this market has failed to follow through on any intermediate term move and thus lacks the same follow through potential to the downside even despite my bearish views on the market nit eh long term.  Bonds found some resistance after retracing over 50% of its previous drop, but Greenspan's voice this week gave the market a potential turning point, especially as energies may offer some relief to a failing stock market and thus give some downside to bonds.  All signs point to developing put plays in this cheap option market right now, as potential volatility to the downside is quite high.  The dollar was choppy all week and lacks a clear direction, but overall my call for support at 87 and a trading range up to as high as 92 through the end of the year is still holding and I would suggest that it has some upside given its current price.  I recommend selling the Canadian, yen and euro in that order.

Grains
Continued weakness in grains came on news of Katrina's potential rainfall for several potential growing regions and offers long term grain bulls a great value buy.  For clarification's sake a reference to a value buy leaves the door open to a difficult to call bottom and potentially further downside, but suggests that this value price will ultimately prove profitable as the counter-seasonal trend in the market should offer a rally as harvest and China demand become a factor.  Rice remains a breakout buy.

Meats
Cattle strength came despite an initial sell the news reaction to last week's cattle on feed, which was bullish for the market.  Moreover, the strength comes as it breaks critical near term resistance and shows itself to have a firm rebound off of technical lows.  The gut says mortgage the farm on Dec. puts and watch this market fall despite last week's action.  Hogs, which have been a technical buy for weeks, it right at resistance and I would recommend profit taking and dropping down to a base bull position as the market could easily pullback 3-4%.

Metals
Gold and silver weakness came this week despite a choppy dollar and I suspect the fallout in precious metals is nearing closer every day.  Continue to be steadfast in a put buying strategy on bounces in gold, silver and ever copper.  The platinum market is a long term sell and palladium is a value buy.

Softs
Coffee prices continue to tumble as the squeeze is dead and the chart is about as ugly as it can get.  Not much to hold the market up as we leave frost season with no worries.  I remain a long term bull, but don't touch this market until we break 110.  Cocoa is choppy and non-directional as we head into the October elections in the Ivory Coast.  I continue to recommend a cheap long strangle in this market with Dec. options.  Cotton is still a sell.  OJ is a core of my gut buy as the market could see beneficial news from Brazilian tariff issues and this week's hurricane scare will not be the last.  Sugar selling pressure is showing signs of waning and I am lost as to its next move.  Cut put positions down to minimal quantities and wait and see.  Lumber is getting to my 250 target and I would recommend a buy at the 230-240 range.

James Mound, owner of JMTG Brokerage LLC, MoundReport.com and author of the book 7 Secrets, writes the Weekend Commodities Review Newsletter. Receive your free weekly subscription to the Weekend Review by e-mail. Click here.