Energies
The energy complex continues to offer choppy volatile action as the combustible elements of Osama, Nigeria and Iran heat up the market hysteria.  While I suggested that you stand aside on a run up to about $68, my gut says the contract highs will hold for the short term, and possibly for the extent of this current rally.  The market is unable to justify the move to fresh highs without a fear becoming a reality.  This offers a great opportunity to sell call premium on a move to $68 or to sell futures with a stop above the all time highs.  Natural gas has been so ruined that at this point it is a value buy with cheap calls that will spike in volatility premium on any surge up. 

Financials
A difficult weak for the bears to watch in the stock market as earnings turned the corner and even shook off an ugly GDP report.  It is vital that the market fail immediately to avoid testing and likely setting a fresh high.  Market momentum must be stopped in its tracks and there is nothing like a Greenspan finale FOMC meeting to do just that.  Bonds sold off hard but paused due to an ugly GDP only to likely pause again before the Fed meeting.  Tuesdayââ,¬â"¢s meeting will be Alanââ,¬â"¢s last stand before Bernanke takes the thrown and I suspect a quarter point is a given, but donââ,¬â"¢t be surprised if Alan puts a final punctuation on his amazing run by making the statement something that forces Bernankeââ,¬â"¢s hand and essentially tells the market were the end of the hikes will come.  This of course is not going to be written in stone, but rather a way for old Alan to extend his tenure just a bit more.  I have been watching these meetings too long not to think this last meeting for Greenspan will be more political than one would have thought.  The dollar is in need of a serious hand and it will be difficult for the Fed to provide a bounce to the stock market, a break in bonds and a dollar boost unless Alan puts a definitive cap on the hikes.  However, he will have to set the stage for a couple of more quarter pointers before he says wave the white flag.  The Canadian dollar is still flying high and the recent retracements was barely a chink in the armor of this sleeper of a bull.  I remain a believer that the market is in serious need of a real retracement and would suggest March bear put spreads. 

Grains
A strong bean bounce and a breakout in wheat suggests the long awaited grain rally is in affect ââ,¬â€œ for now.  This will likely be short lived and an opportunity to relive the bulls of some losses before the market reverses in February and sets a bottom sometime in April.  This will ultimately allow for an excellent entry point for the real bull run expected to get jumpstarted sometime around June.  Rice truly failed to break critical 850 resistance, but watch out when it finally does.

Meats
I suppose a couple of cases of the old crazy cow just doesnââ,¬â"¢t have the affect on the market it used to.  Nevertheless the cattle market was looking for a reason to fail and a delayed reaction is not so surprising.  Shorts are recommended all across the meat complex.

Metals
Anytime you see a bull market close in the lower 50% of the intra-day range you can acknowledge profit taking, maybe even a loss of momentum, but gold also broke a trend line support on a daily chart going back to December and the volume was there to back it up.  If the market breaks and close below 555 watch out.  Silver showed some independent strength this week and will likely fizzle out if gold makes it's move downward.  If the copper option market wasnââ,¬â"¢t such a scam I would put some serious chips in for some bear plays ââ,¬â€œ simple outright put plays OTM by about 30-40 points with a bunch of time could payout ââ,¬â€œ copper has a history of large one day plunders during this multi-run it is on.  Platinum remains a sell while long palladium continues to be a good hedge against bear plays in metals.

Softs
OJââ,¬â"¢s bounce this week is not all that impressive and I have a feeling this will be the critical trend week in this market as a break above 125.50 or below 114.50 is a clear intermediate signal to me.  Coffee looks like it is charging up for a bull launch and I would not wait to get long this market with some bull call spreads.  Cotton continues to be a sell.  Cocoa broke critical support but has all the fundamental and technical merits of a market about to go on a serious bull run.  Calls are dirt cheap.  Sugar volatility is ridiculous and the market is taking full advantage by being a market order only environment and taking specs to school.  Puts are still the way to go.  Lumber is a short.

Disclaimer
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