Energies
Despite abundant inventory growth, crude oil marched straight to $100, setting up an epic double top or one heck of a fake out. Fears of OPEC supply cuts have fueled fund buying and spec interest in a market overbought and under criticized for being inflated beyond reason. One thing about market hysteria is that it is far from predictable by nature of its very existence. Thus a market that is functioning in a non-rational way will likely have a reversal that equally lacks rational forecasting. How perfect would it be if this historic run ended with a double top at $100? I would get short with June bear put spreads and play a solid risk to reward ratio because a fall from this height would have some serious gravity behind it.

Financials
The stock market has found some temporary support offering a consolidation pattern before further declines. I would sell calls. Bonds hit a perfect price support just above 115 suggesting the longer term trend line support will hold and offer a test of 120 or higher. Overall, the premiums in the bond market are ripe for the selling as the Fed has offset the shock of potential unlimited rate cuts with a more cautious verbiage in their last FOMC policy statement. Fed speak by Chairman Bernanke on Wednesday and Thursday should setup an intermediate term congestion pattern. This sets up some fundamental topside resistance but limits the downside exposure. I would try some short condors here or a naked strangle as far out as June.

The dollar is choppy and the euro is bouncing despite the ECB suggesting declining growth for 2008 and beyond. However I suppose some growth is better than no growth at all. I continue to see a long-term dollar rally in the cards and recommend taking this bounce in the euro and jumping short with bear put spreads. The yen broke trend with a solid breakoff from a perfect setup for a top and crash. I would get some straight puts for June and play a volatile and unexpected break to the downside. The Canadian dollar is likely to see some pressure as Canadian banks showing first quarter numbers start reporting next week, many of which will show significant writedowns from mortgage fallouts. Bank of Canada governor Mark Carney suggested that his first move in office will be to cut rates at the next meeting to help will the worst export crisis in the country's history. This is monetary policy speak for saying the currency is too high and they need some selling to come in so exports pick up. I would jump on the train ahead of the cuts and get short the Canadian.

Grains
Continued strength in beans and corn have sustained a grain rally that is just about topped. Surely many of the shorts have been forced to cover and what remains are relatively new positions offset by funds that are long and very profitable. The collapse will be hard and fast and I see put options in any of the grains as the way to go here. Granted, the exposure to plantings and acreage numbers are present, but the market has about a one month reprieve here in which they can sell ahead of the report and react to this week's USDA ag forum forecasts.

In those forecasts, wheat acreage in 2008 is expected to increase 3.6 million acres to 64 million. Winter wheat area is up 1.6 million acres and spring wheat (including durum) is expected to gain 2.0 million acres. Corn acreage for 2008 is expected to decline 3.6 million acres from 2007 to 90 million acres, the second highest on record since 1944.

Soybean area is projected to hit 71 million acres in 2008, up 7.4 million from last year, supported by higher prices. Increased area is expected to come from reduced corn and cotton plantings, as well as from increased double cropping. Rice planted acreage for 2008 is projected at 2.70 million acres, down 61,000 acres from last year. The drop in production is attributed to higher prices for competing crops and expectations of another year of high fuel and fertilizer costs.

Meats
Annual cattle data this week showed a major drop in cattle on feed due to high slaughter in 2007. At the same time, this implies high inventory with exposure to supply issues later into 2008. This has helped to keep cattle prices up, but ultimately will lead to the market's ultimate top as grain prices push slaughter numbers higher throughout the year. Hogs had their first negative profit quarter in the 4th quarter of 2007 as prices dropped. Recent price support should continue, however as supply is held back in hopes of higher prices. I would buy the dips.

Metals
Metals prices continue to climb, making their epic move through critical historical price levels. Silver is due for a serious price correction and if you are long futures or short put options you could be on the wrong end of a volatile collapse. While gold is showing bullish technicals this market climbing a very slippery slope. Vertical formations like these do end smoothly. Copper and platinum are both aggressive shorts that carry a bit too much risk at this point for the reward. Palladium is no longer a strong buy at these levels and should be left alone until a significant price retracement is seen.

Softs
Coffee continued its solid climb through critical price resistance, supported by short covering and skyrocketing Robusta prices. Robusta coffee prices hit levels not seen in over 10 years as reports of farmers hoarding crops and rising spec demand have forced a major price rally. Rising demand for coffee has set up a year in which supply is expected to barely meet demand, leaving loads of exposure to supply problems and a potential shortage. I expect a pullback over the next few weeks, but would buy the dips aggressively as this market has more upside in the long term.

Cocoa volatility is at historic levels as it continues to set fresh all-time highs and take shorts out seemingly every other day. I bailed out of the long side of this market a bit early, although I do feel the move has little left to it. I would accumulate some long term puts and avoid short calls or futures exposure.

Cotton caught a strong bid after a major double lock limit technical bottom fueled a rally supported by concerns over U.S. planted acreage. This was confirmed by this week's USDA report sighting reduced acreage forecasts for 2008 amid a rollover to planting other more profitable grains.

Sugar is riding a crude oil run and a few fundamentally supportive news pieces, but rising acreage in Brazil is likely to limit the run as forecasts for a mega 2008-09 crop year stunt rally hopes.

OJ prices have tumbled of late as ideal winter weather in Florida set up a solid crop, but a bid this week occurred as funds entered the market on value buying and concerns over yield continue to be heard in the whispers of traders. I would get long ahead of the bounce.

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.