Energies
A bounce back in energies on Friday came on the news of a foiled suicide bombing attempt on a Saudi Arabian pipeline, giving a much needed bounce to a very bearish market.  With an oversupplied seasonally poor demand period ahead the market has little to rally on other than Middle East concerns.  If Monday doesnââ,¬â"¢t hold Fridayââ,¬â"¢s gains then watch out as new lows are likely right around the corner.  Otherwise, look to get short some calls and possibly futures on a move to about $64.80 on April crude.  Natural gas is overdue for a bounce and while it is a low probability play I would recommend long April futures with a stop at 7.04.  Look for a quick 50% scale out at 7.78 and if it breaks 8.01 you might see a run to about 9.40.

Financials
The resilient stock market showed its true strength by ignoring Fridayââ,¬â"¢s Saudi news and I would say that a market that is not vulnerable to those fears is not a market that is about to crash anytime soon.  Nevertheless it is difficult to think that a clear break through 1301 on the S&P is likely and I remain short bear put spreads for April and June time frames, expecting a drop below 1250 over that time frame.  Bonds remain bearish but continued support around the 112 mark is a growing concern. 

Cheap 111 puts to play a breakdown might be the safest play with an ideal ROI coming on a break below support.  The dollar continues to find quiet strength and while I remain a bull there is only a low likelihood that new highs will be hit in the near term.  The Canadian dollar remains a short play with an 86/84 bear put spread offering a near 1 to 3 risk to reward potential.  The yen offered critical support this week suggesting a possible bottom and a price surge ahead.  If you can get in around 8620 I would recommend a futures buy and a stop at 8485 or OTM calls to get a better ROM (return on margin).

Grains
Strength in grains persisted this week, with wheat breaking out early and corn breaking out on Fridayââ,¬â"¢s option expiration.  This will likely be a strong and short lived surge in grain prices that bulls can take full advantage of.  The intermediate time frame suggests a quick retracement to follow and another surge ahead of the summer months.  This weather season is expected to offer some volatility, but the growing concerns of oversupply in beans is offsetting some of the pre-weather short covering rallies you might expect.  Rice failed as I had feared and I would play a wait and see before reentering this long term bull market.

Meats
Cattle prices continue to melt away, and too few specs are jumping on this bandwagon.  The market is begging to fall apart and puts remain cheap as underlying volatility is still fairly low.  Hogs are all over the map and while I remain bullish, a break and close below 60.90 would be a technically bearish indicator.  The upside potential remains and the volatility and COT data suggests that if the support holds the market is capable of a serious technical short covering rally.

Metals
Silver surged on Fridayââ,¬â"¢s close and is setup to gap down heavily on Monday.  Both gold and silver are in serious need of a critical failure in order to maintain the long term bull market potential.  A relief selloff gets a large spec liquidation underway, which clears the air for another long term surge higher.  These markets are a good 30% higher than where I had suspected the near term top would be, and they say the bigger they are the harder they fall.  This market surge is so big that the fall will be devastating and bulls playing this dangerous game at these prices are going to be ruined if they donââ,¬â"¢t protect themselves up here.  Copper continues to be setting up a top as momentum indicators suggest it doesnââ,¬â"¢t have much life left to this historic bull run.  Platinum remains a sell and I would walk away from Palladium until it breaks back above 910. 

Softs
Coffee showed signs of picking itself up off the floor after the fund liquidation we saw the past couple of weeks.  Bull call spreads and possibly a cheap OTM put to make a strangle in conjunction with the bull call spread are two recommended approaches.  OJ is slowly resuming its bull trend and is truly skies the limit if it can break through the recent highs.  Cotton is a sell ââ,¬â€œ still.  Cocoa is actually now in a bear trend but will likely consolidate.  This market continues to offer short strangle players one profitable trade after another despite the threat of a major move in the near future.  Sugar is a 150 point down day away from destroying the bulls.  Take a real shot at this market with cheap OTM July puts, because when it falls it will look like the natural gas chart.  Lumber remains in a bear mode ââ,¬â€œ sell calls on a bounce.

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.