Energies

Crude oil is showing signs of topping below 83.80 resistance. I believe this market is setting up an ultimate price failure to below $50 before year's end, but the next week may provide the ultimate indicator. Anticipate a dollar rally pressuring oil prices at these levels, as the demand boost in oil from weaker dollar prices is unlikely to continue. Natural gas has turned ugly on a chart and I would stand aside from long positions.

Financials

The stock market is rallying during a period in which weak GDP and employment show the bailout for what it was - a Bandaid. Unfortunately this is once again suckering in longs into a market destined for a major price collapse. Market psychology can self-destruct in an instant, and sustained bullish sentiment during negative trend shifting economic news is a recipe for disaster for the bulls. Bonds confirm this through a flight to quality demand that is surging prices to recently fresh highs, suggesting continued upside is likely during a stock market decline. The U.S. dollar is showing signs of downside price exhaustion, and I anticipate a strong rally to ensue during the month of August. The Australian dollar has shown resilience after its recent failures, but this market is the beneficiary of U.S. dollars migrating over as traders shift their mentality of U.S. dollar safety to thinking Australia and Japan have more stable currency outlooks. That does not necessarily mean that the support coming in from this will continue, and a U.S. dollar rally is likely to rock the Aussie to the low 80s. The Canadian dollar also showed signs of topping on Friday and I believe that a Monday follow through could spell downside volatility in this currency. The Canadian economy is strong, employment is stable, real estate is stable, everything good is priced in and yet the market remains below the highs. This is not a bullish fundamental structure in my opinion and this market is setup for a strong price decline at the slightest inkling of economic weakness. The euro and pound are likely to experience strong declines and I recommend pulling any bullish positions and turning bearish in a hurry. The Japanese Yen remains a strong breakout bull market, setting fresh highs this week amid a U.S. dollar walkout. I suspect that a U.S. dollar rally may not hurt the yen as bad as one would think as the yen will likely benefit from a weaker stock market and continue to gain momentum on its own bullish fundamentals which is why I continue to stand by my forecast that:

The Japanese Yen futures will hit 140 before 80 or I will quit writing the Weekend Commodities Review forever.

Grains

Grains made a massive move higher on panic buying from Russia's ban on wheat exports. Those who were around during the big grain and rice rally of 2008 experienced a true market panic as one country after another announced export bans in a move to secure supply during hysteria buying demand. The wheat market showed just how capable it was of repeating the top-setting pattern of 2008 with a nearly lock limit up overnight price move (nearly double limit as the day session provided lock limit of 60 cents), followed by a lock limit down close. In 2008 the high was set quite similarly with a $1.30 lock limit up to $1.30 lock limit down in the same day, constituting $2.60 or $13,000 per contract, and the largest move in one day in futures history since the advent of limits. The bottom line is Monday is the tell-all day - close lower and that's all she wrote for the grain markets this year - close higher and we are either going to congest below the highs (most likely) or make another volatile move higher. Expect all the grains to follow wheat's action as the fear of another 2008 situation will guide the grains one way or the other over the next few weeks. However, one exception might be beans which have been rallying independently and could experience a strong move higher. The rice market turned south along with wheat and unfortunately finds itself fairly correlated to wheat's next move.

Meats

Hogs exploded to the downside showing that a clear top is in and the potential for a massive market correction may be underway. Cattle also appears to be topping and a strong short with straight puts, playing a more long term time horizon.

Metals

Gold continues to be the beneficiary of strong global demand, a weak dollar and very low interest rates (which pushes demand to the more speculative gold since the safe haven investment pays very little). Silver is also showing support along with gold, but in the end both markets will likely come crashing down. In the meantime I wouldn't expect the rally continue as the U.S. dollar rally pressures prices. Look at September silver and gold puts to play the short term slide. Copper has been resilient, and a strong dollar will put the kibosh on the idea that global demand will remain stable.

Softs

Cocoa showed strong signs of finally topping after what felt like the 200th consecutive price collapse to test the recent lows. However, this price failure is quite distinct as it topped below the previous rally and suggests the market's inability to push prior price highs before collapsing - another indicator of weakening market sentiment. This is exactly the type of thing the cocoa market needs to truly top and sail south. Coffee did appear to turn bearish on a chart, but I recommend not getting ahead of the correction in this market as true support has not been penetrated just yet. The market has several supports between current levels and bottom support at 155. Cotton remains strong and I anticipate a Round 2 to this breakout rally, so buy the dips. OJ has developed a bearish pattern once again and I expect a lack of hurricane threat to setup an aggressive downtrend over the coming weeks. Sugar has likely topped just above my prior 1950 target and puts are recommended on the way back to 1450. Lumber remains a cycle 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.