Energies

Crude oil retreated from the highs despite ongoing protests in Egypt. It is apparent that while there is some fear premium in the market, a percentage of the fears from the previous weekend has been removed, leaving little reason to push oil to fresh highs. I continue to see the Egypt crisis as a catalyst for a top in oil and recommend bear put spreads in crude oil and heating oil. Natural gas remains a long-term buy with straight calls.

Financials

A massive recovery in the stock market following the Egypt-based selloff the previous Friday has the S&P500 at fresh highs. The market continues to exceed my wildest expectations for upside strength and this resilience is difficult to contend with. Nevertheless the market is in a critical area for topping and I suspect the overbought conditions are going to boil over this week. Straight puts are recommended to play downside volatility and capitalize on a relatively discounted VIX. Bonds remain a buy on this recent dip as the Fed's locked stance on interest rates leaves bonds susceptible to a rally on a stock market slide. The dollar supported out inside my Mound Ladle Formation support band and I expect strong rallying from here. The euro should have set the high for possibly all of 2011 last week. The Aussie and Canadian dollars remain strong shorts at these levels. The Japanese yen remains choppy and a long strangle is recommended with a bull side bias long term. 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 all made subtle bull breakout technical moves last week as continued fear of a global grain panic builds premium into these markets. I do believe that the grain rally should be sold into as it will be short-lived in 2011. The market is in the 'what-if' stage of the winter season as they get ready for plantings. What if China needs to import corn? What if Australia's wheat crop is gone? What if cotton acreage squeezes beans? Well how about what if the market meets demand? I do not expect grain prices to test 2008 levels - the fundamentals are not there yet and the hype isn't strong enough. Soybeans are a good spread play against corn, but overall I would be a put buyer across the board. Rice is a sell into this short covering rally with straight puts.

Meats

Live cattle developed a key turning point technical formation last week with a secondary spike high top on a daily chart for the April contract confirming a bearish momentum turn. Hogs also provided a bit of a bearish turn last week and both markets will be hard pressed to make fresh highs.

Metals

Gold and silver stayed in a choppy range as concerns over a commodity inflation boom remain to support this sector. I do not see support holding for much longer and look at the next two weeks as a bit of a make it or break it period for metals to begin their descent. Straight puts and ratio put backspreads are recommended.

Softs

Coffee is a strong short play despite fears of a shortage. The market is susceptible to a hysteria-based rally, but if history is any guide then this is the time to get short coffee with bear put spreads and ratio put spreads and even straight puts. Cocoa is a strong short as Ghana steps up exports to make up for the Ivory Coast ban, helping to squeeze Gbagbo even more to leave office. Cotton appears to have hit its top as a spike high reversal signals a strong short with straight puts in that market. Look for a move below 156.90 to confirm the momentum switch. OJ is a sell with straight puts or short futures with call protection. Sugar's collapse on Thursday is an indication of the downside volatility this market could exhibit on its way down, but the strong close on Friday makes Monday an all-telling indicator day for this market. Lumber remains a cycle buy on its way to 350.

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.