The U.S. dollar rose significantly on Friday due to a bull shocker of an employment report. While I remain a strong dollar bull it is important to acknowledge three critical components to this employment data. First, its holiday time and employment increases around the holidays, with a number of retailers employing early and over a longer period with a smaller quantity of holiday new hires in an effort to reduce overhead. This means that an improvement from 10.2% unemployment to 10% is not that far fetched regardless of the estimates. Second, employment reports can get revised over a multiple month period, which means 10% now could be 10.1% next month when they revise - which is by no means guaranteed to happen, but an important component of this report to remember. Last, but not least, is employers are buying into the bullish economic hype - the act-as-if approach to growth

Energies

Energies have shifted to a bearish outlook but this weak volatility decline is not overly convincing. Until volatility to the downside increase ($3+ a day) this is more congestion than a bear move. Overall this market sector is stuck as global demand is still in question during a period where a mild winter will mean strong inventories. I recommend put plays in heating oil, rbob and crude oil simply based on a strong dollar creating weak global demand.

Financials

The employment report was clearly bullish, if in bullish sentiment creation alone. The S&P is likely going to see a move to 1140 but overall I recommend selling any rally. Bonds have some downside potential but I am a buyer until we break 117.

Grains

A stronger dollar means pressure on global demand for grains. Expect strong selling in beans and corn in coming weeks and months. A decent buy from China on some beans should be short lived and maybe even a last big buy before a dollar bull move.

Meats

Cattle self-destructed and the downside here could be epic. Puts remain underpriced as compared to my anticipated downside volatility. Hogs continue to hold strong trend line support and are a buy on dips.

Metals

Gold and silver showed a glimpse of the potential collapse that a strong dollar can slap on this sector in a blink of an eye. The downside here is gigantic as a simple retracement on a monthly chart puts us around $1050 on gold. Silver, which has shown a higher percentage move up in recent months, is even more susceptible to a long liquidation on this downside move.

Softs

Coffee is still a long term buy and a near term short. The long term fundamentals suggest a 2010 bull run to remember (a year late by the way), but a strong dollar is likely to pressure coffee in the near term as supported by Friday's slide. Cocoa remains a sell with puts, as a pre-March 2010 election may actually happen in the Ivory Coast. Cotton is a buy on dips. Sugar has a bit of a not-so-bullish flag pattern developing on a daily chart but I am still relatively convinced a breakout to the upside is the next move in this market - although a strong dollar is unlikely to help support that. Overall I would avoid sugar until a clear break of this flag is seen. OJ is a buy on dips.

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.