Energies
The highs clearly held in crude and the energy complex has shown a roughly 10% retracement in two weeks.  Anxiety and fears surrounding a few issues (Osamaââ,¬â"¢s video appearance, Iran & Nigeria) calmed a bit, but now weather may influence the market and offer a bounce into next week.  Crude is on critical trend line support and todayââ,¬â"¢s inability of the market to close in the lower 25% of the trading range suggests some possible strength on Monday and offer some near term support next week.  If you can get a shot to sell premium or futures in crude on a move to $64.50 -$65.00 that should be about the extent of the bounce.  Natural gas is overdue to see price support.

Financials
While the stock market has exhibited decaying volatility and appears primed to fall, todayââ,¬â"¢s reversal suggests strong volume buying on dips will float this market a bit longer.  I remain bearish but this selloff looks like it is setup to occur in several one day ââ,¬Ëœfall off a cliffââ,¬â"¢ style breakdowns that leave many bears out of the game.  This means bear put spreads are one of only a few ways to approach the market in a risk managed way that keeps you in the market for those one day drops.  Bonds must break 112 on the 30yr. to gain downside momentum which it should have after the events over the past few weeks have unfolded.  The dollar choppiness has no end in site but the bear dollar mode we appeared to be in as we headed into ââ,¬â"¢06 is no longer and the market will either remain choppy or give us bulls the breakout we have been waiting for.  I recommend long futures on dips and short Canadian and euro. 

Grains
The crop report offered bulls some help this week, but overall the market lacks follow through on any move.  I remain a hesitant bull with a quick trigger on taking short term profits as the intermediate time frame suggests downward pressure after a possible bull burst in the next couple of weeks.  Rice broke up through 850 and back below which is quite bearish.  A strong Mound Ladletm setting up for a massive breakdown may occur way before I had suspected.  Look for a quick move (by Thursday at the latest) back above 850 to resume the bull trend otherwise I might be inclined to abandon ship for the time being (at least through the end of Feb.). 

Meats
Cattleââ,¬â"¢s low underlying volatility continues to put traders to sleep, but donââ,¬â"¢t be surprised if some swift downward price action picks up the pace over the next couple of weeks.  Buy bear put spreads and straight puts to play the move.  On the other hand the run in hogs is strong and should have some legs.  Buy a Monday dip and get on the bandwagon for a bit.

Metals
So after a very long wait I might just get a little redemption as gold and silver plummet off their highs to begin what could be an historic retracement.  Put in combination with a strong shift on the US dollar I would suspect this downward push could see silver below $8 and gold below $500 in a short time frame.  Copper is overdue for a major downside plunge and a move to 1.60 is not out of the question.  Platinum remains a sell and palladium a buy as a hedge play against the short metals.

Softs
Coffee shaked a handful of specs out but appears ready to breakout to the upside next week.  Look for next week to set the trend either way.  OJ is getting into full bull mode and look for a break above todayââ,¬â"¢s highs to signal a full fledged breakout, which could easily occur with this weekendââ,¬â"¢s expected cold weather.  Cotton is all over the map but continues to be a sell.  Cocoa is redeveloping support and I remain a steadfast buyer of May calls.  Sugar puts remain the play and this week is offering some strong indications that a major (natural gas like) retracement may be underway.  Lumber remains a sell.

Disclaimer
There is risk of loss in all commodities trading.  Commissions and fees vary per individual and therefore are not included in profit, cost and risk scenarios.  Please consult a licensed broker before you trade for the first time.  Losses can exceed your account size and/or margin requirements.  Commodities trading can be extremely risky and is not for everyone.  Some option strategies have unlimited risk.  Educate yourself on the risks and rewards of such investing prior to trading.  James Mound Trading Group, or anyone associated with JMTG or moundreport.com, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (clients or otherwise).  Past results are by no means indicative of potential future returns.