Energies
The news this week is way ahead of the price action as all signs are pointing south amid a continued rally to fresh contract highs. Saudi Arabia increases output, global demand forecasts are cut, the U.S. stops building the strategic oil reserves and yet all of this bearish news does little to stop this market hysteria. In cases like this you follow the fundamentals and wait for the price to turn. Look at Dec. 75 puts in crude or an September bear put spread in heating oil or natural gas.

Financials
Strong retail sales helped to boost the S&P to fresh near term highs, setting the stage for a possible continuation of the short term trend. While I am not entirely convinced that it will hold, the longer term trend line resistance and overall bearish long term chart pattern suggests that this market is near an intermediate term top. Long September 1150 or 1200 puts plays a great volatility pop that is likely to occur on a severe price correction over the summer. Bonds remain choppy and a great short strangle opportunity. The dollar is puling back a bit amid the U.K.'s decision to not waiver in its stance to avoid future rate cuts. The dollar is still in the very beginning of a long term trend reversal and should be bought on dips with shorts in the euro and pound also recommended. The Canadian has held support above 9675 and should be avoided until a break below that mark, indicating a short play at that time.

Grains
A successful weekend for corn planting should be the straw that broke the bulls back and send the grains reeling. Corn is setting up what I like to call a whip formation. It is where a market breaks out of a channel or wedge by setting a fresh near term high (or in this case an all time high) and then 'whips' back to test the lower end of the previous congestion. This is a momentum boost that often gives the market the push it needs to break the congestion, in this case to the downside. Expect breakdowns across the board, furthered by a continued U.S. dollar rally and a sharp reversal in oil in coming weeks. The roll from corn to beans because of delayed planting has become a bit of a non-issue because of recent plantings reflective in last week's crop progress and what should also be revealed after the close on Monday. Long Dec. corn $4 puts should offer a solid risk to reward ratio because this option has not gained a cent since the highs and is likely to get a delayed volatility spike on a significant price breakdown. Rice broke critical support and appears to have set a cycle top. This was always a 'rough' market to trade but it has now become virtually impossible despite the great technical setup.



Meats
A bit of price exhaustion in cattle sets up some selling expected this week, along with hogs which have ran out of steam in its overbought market condition. Put plays across the board.

Metals
Gold got a boost this week as mining issues may come to the forefront in Venezuela as Chavez strokes his ego. However the market has been glued to the oil picture and will likely fail in coming weeks as oil tops and the dollar makes continued gains. Silver, copper and platinum are likely to follow suit. The global economic slowdown will put pressure on copper and platinum as demand declines.

Softs
Coffee continues to show strong signs of price congestion as a bull pennant unfolds and the market spikes to fresh near term highs. Cocoa is topping as strong selling pressure is coming in waves with little to impress on rally days. This market has likely seen its highs in the near term. Cotton is holding a nice bottom support and could see significant gains in coming months despite lackluster momentum on the charts in the near term. Look at deep out of the money calls and expect a significant rally through October. OJ is getting whacked as light volume is triggering sell stops and testing critical 105 support. I remain a long term buyer down here. Sugar is showing a choppy pattern as a batting heads environment tries to hold some level of price support. On one hand you have ridiculous oil prices and increasing use of sugar for ethanol production. On the other hand you have overwhelming supply that should squash any increase in demand. A bit of a quandary for the market but overall I am buyer of calls on a value play down at these price levels.

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.