Energies
Major volatility continued in energies this week as the market set a very critical secondary top on worries of Hurricane Rita?s potential impacts in the Gulf.  A massive selloff on Friday should follow through to Monday as what was once a Cat 5 heading straight for 3 of the 5 biggest refineries in the U.S. ultimately became a sustainable Cat 3 with minimal impact by comparison.  This will most likely signal the end of $60 oil, especially if the remainder of the hurricane season is uneventful in the Gulf region.  A quick hurricane analysis suggests that while the forecasts were for 2005 to be one of the most active hurricane seasons on record, we just experienced the 17 named storm and the highest amount in recorded history is 21.  Moreover, the was a fairly active early part of the hurricane season and as history as a guide will most likely offer us a quieter than expected remainder of the season.  This bodes well for the bears and suggests selling call premium on bounces and buying put spreads across the energy complex is still the best recommendation.

Financials
Showing a secondary top below 1250, the S&P offered some strong selling pressure this week as fears of hurricane based economic issues plagued the market.  I would be happy to sell a Monday bounce and look for a move below 1200 within two weeks if this is in fact a bear turn.  Bonds bounced on the FOMC aanouncement this week, which hiked another ? point but also deflated concerns over long term effects of Katrina and lessened the affect of future hurricanes on the market.  The dollar bounced as anticipated and is now in a bit of a mid-range between my expected end of year channel.  I remain an out of the money option seller to capitalize on the expected rangebound action and would not play the dollar long or short at this price.  The Canadian dollar is long overdue for a correction , especially if oil is on its way down.

Grains
Grains remain choppy and high on my value buy list.  Look for strong bids in wheat to continue as the whisper of an improving supply and demand picture should get louder.  Bean calls remain a dirt cheap bargain ahead of expected volatility spikes, and I would recommend November $6 calls and January $7 calls for practically nothing!  Rice may be getting some attention because of Rita but the bottom line is this is a technical breakout and outside of a Monday retracement this should be the real thing.

Meats
Cattle and hog prices continue to strengthen and I continue to fail miserably in my attempts to catch a cattle collapse.  I must admit the technical significance of the amount of time it is stabilizing at these levels but not breaking to new highs, indicates a clear channel ahead of a major breakout.  Volatility is expanding in cattle and I highly recommend strangling the market if you are tired of hearing my bearish rhetoric.  Hogs broke through critical resistance at 6570 and are quite technically bullish.  The gut says get short on a timing play and bail if we are above 66 come Friday, otherwise the bear play should have some legs to keep running south.

Metals
A major gold breakout got shaken up towards the end of the week as Rita fears subsided and a crude oil selloff paved the way for a retracement in gold prices heading into the weekend.  Technically the breakout is reminiscent of the last two gold breakouts on a monthly chart, showing significant likelihood of a major retracement over the next months.  On the chart below you can breaks through 430 and 460 led to 10% plus market retracements within 3 months.  To me, the price of puts are so cheap, and the market is too bullish not to continue to be vehemently contrarian. 

Softs
Coffee prices remained choppy and volatile as many market participants are trading on fears of continued damage to New Orleans warehouse inventories and the possibility that the exchange will decertify a large amount of those stocks.  I remain a long term bull and see such a tremendous resistance level at 110 that I am hesistant to pull the trigger on buying bull call spreads.  I recommend a half in approach with the patience to double up on a move down to 84 or so.  Cocoa is in a steep decline and is a value buy down here.  Look 5 months out and get some March ?06 calls.  Fears that Rita would hurt the cotton crop in Texas should be completely thrown out and a strong sell is play here.  Sugar may have given bears a false signal on the gap down this week and I am in wait in see mode.  OJ is breaking out to the upside and deserves a good look.  Lumber is all over the map with hurricane rebuilding action, but we are at a sell the news juncture once we get the first down close this week.