Energies
A massive spike in natural gas prices on cold weather concerns sent the energy markets into a hysteria based spike upwards, before a sell the news affect took hold of the market on Friday.  With the exception of Katrina, every weather related rally this year has been met with a sell the news result and offered a pre-reality short selling entry point.  Nevertheless, the natural gas market remains in market condition that is in absolute hysterics and while I remain an avid OTM call seller you MUST have some deep pockets to play this market.  Crude remains in a slow down trending channel and I continue to sell strangle this market.  OPEC this week will be more hype than news ? although that isn?t anything new.

Financials
Bear momentum developed this week as the market failed to sustain any opening rallies and looked as if all news was bad news.  As the affects of a low profit margin retail season and the profit taking off the recent surge in prices takes place ahead of the New Year, expect a sell off to ensue in the stock market for the next week or two.  Bonds continue to meander just above recent lows and is building congestion before breaking down once again ? get short NOW.  The dollar continues to fail just above 92, making the forecast for an 87-92 range-bound market through the year end to be quite accurate to date.  I suspect we will see a bounce in the euro above 120 and the dollar below 90 before year end, but then watch out for a bull dollar in ?06.  The Canadian surged to new highs, and remains an overbought breakout bull market.  It is time to jump on this bandwagon for a bit, but remain a cautious long term bear. 

Grains
Grains got a semi-bearish crop report only to rally on the news and hold much of the support and strength seen earlier in the week as traders short covered ahead of the report.  Look for continued strength across the board in grains and a winter rally to ensue.  Rough rice remains a breakout buy and should see significantly higher prices.

Meats         
Cattle is showing signs of setting a top again, but I have been chasing this market for two years with only one major breakdown.  I highly recommend keeping a bear put spread or two in backdrop, but playing a volatility long strangle position over the short term.  Hogs double topped on the Feb chart, but until we break 62.60 or 68.10 I don?t see a reason to touch it.
           
Metals
This week we saw a continuation of last week and the last month as the gold and silver markets surge on short covering rallies and market hysteria.  I will admit it is possible for any market to run on its own merits, and for large foreign buying to change the structure of a given market (case in point ? treasuries), but the dollar is strong and the energy markets are 20% plus under Sept/Oct. prices so what is the fundamental factors that will hold these gains for these metals markets?  Put buying continues to be the right approach ? you can get knocked down but the loss is controlled and defined, and it will keep you in the game and be there for the big payoff.  I may have missed a huge chunk of this gold move but it doesn?t mean it will continue and it doesn?t mean the market isn?t even more overbought and due to reverse than before.

Softs
OJ surged on Friday?s crop report news showing a 12% production drop from previous forecasts, but held less than 50% of its opening gap move and looked to maybe setting a top.  Monday is critical and if the market fills the gap I would get aggressively long OTM puts (dirt cheap by the way) to play a possible breakdown in the market.  Coffee lacked any momentum in either direction this week and while I continue to recommend bull call spreads over the long term, this market is far from exciting at the moment.  Cocoa volatility is continuing to expand and the market is primed to breakout to the upside ? buy March calls.  Cotton filled its gap down after Friday?s report, but has no fundamental reason to push higher.  The market does, however, need to hold 5350 and is a great short with stops above that price.  Sugar is clearly the runaway bull market underdog of the year and would make Jim Rogers proud.  Nevertheless a major retracement is setting up and I would develop long put plays right now.