Energies

One of the biggest single day declines in crude oil history occurred as concerns over a global economic slowdown, monetary tightening, and the end of the commodity inflation rally all helped to spark large fund and spec selling. Silver led the charge and the trading world began to see the bubble burst across the commodity spectrum, helping to deflate oil's recent price surge just below key Fibonacci resistance on a long-term basis. Friday offered a key technical reversal after rumors of Greece's departure from the Euro Zone hit the street. This key Friday turnaround is likely to help establish further panic selling in the days ahead. For those unfamiliar with commodity market tops, the declines tend to be more volatile than the rallies, thus suggesting a hard move below $90 is in the works near term for crude oil. Natural gas remains a contrarian play with long term out of the money calls to play a volatility spike while being short the rest of the energy sector with defined risk put strategies.

Financials

Stocks continue to be resilient in the face of a global economic slowdown and the potential for a period of 'risk removal' from portfolios following the silver and oil price plunges last week. Investors liquidate risk holdings during periods of uncertainty and with currency price fluctuation spiking like it did last week this uncertainty has the potential to hit hard and fast. I remain heavily bearish the stock market and recommend straight puts to play the low VIX relative to the average over the past couple of years. Bonds remain a flight to quality buy and I believe are fundamentally bullish as the Fed holds out on a rate hike. The dollar set a clear bottom this week and is a value play against a very bearish euro, although on a technical level the dollar index will need to break through 80 to reestablish a long-term bullish trend. In the meantime I suspect the dollar will run higher and pressure the euro, pound, Canadian and Aussie dollars. The Japanese yen remains a buy regardless of the dollar's next move and I continue to standby my forecast that:

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

Grains

Grains represent the next sector to see massive fund selling following the panic liquidation in oil and silver last week. Grain price support is much more focused on the demand side of the equation than the supply side. That means that any downgrade to the global economic outlook will likely pressure grain prices. Wheat remains a value play against corn on a 1-to-1 spread basis. Look to play discounted near term puts a distance from the market to capitalize on undervalued volatility premium given the price failures that could occur in the coming weeks.

Meats

Both cattle and hogs broke key support last week as a strong dollar and weakening global demand outlook has the meat sector collapsing from historically high price levels. I expect the slide to continue, furthered by an anticipated breakdown in grain prices.

Metals

Comments from last week's WCR: "Silver's overnight collapse is just the beginning of an historic metals failure and an indicator of the volatility that should be expected in the near future as metals become a panic sell by investors overbought in this sector. $28 silver here we come. Gold in triple digits? Sooner than you think. China's slowdown should create a cycle shift in copper and bring that metal crashing down - bulls beware." Not much to change here as the epic collapse continues. Back in Q4 I put out a special report about the Imminent Collapse of Gold and Silver, and admittedly called this failure a bit early, but the fundamental structure that built this bull run is weak at the knees and has been ready to collapse for months. As with many bubbles, prices go well beyond rational prices and logic goes out the window for the last leg of the move, as would be the case with silver's recent spike. Bullion buyers are just that - buyers, and the companies that support that buying only preach buying. But leverage is the biggest enemy of this move and those who scaled up along the way with the additional leverage gained on their original positions are now getting wiped out during this massive liquidation. Gold is likely not far behind with a liquidation event of its own.

Softs

Keep a close eye on Brazilian weather this week ahead as frost remains of paramount concern. I suspect this could be a big turning point for coffee as the commodity panic hasn't quite hit the softs sector yet and coffee traders are likely waiting out the weather before getting heavily short. Cocoa is on the cusp of turning into a bear market as supplies leave the Ivory Coast and the world gets inundated with cocoa during a period of growing global demand questions. Cotton front month is still getting pounded as the liquidation event I discussed in my recent special report Q2 Commodity Collapse plays out. I expect more downside but lack interest in pursuing the rest of this move as the volatility premium in the puts is out of hand. Sugar and OJ remain forgotten markets both worthy of put plays.

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.