Energies

The Crude Oil market continued on its range bound course between $60 and $64 another mixed inventories report was released on Wednesday. The latest data showed greater than expected builds for Crude but an unexpected draw on the Unleaded inventories (down 900,000 b). This is all taking place during the transition period for the refineries and the beginning of the seasonal increase in fuel demand.

I donâ�,��"�t think we will see this market get comfortable with prices below the $60 in the near future as we head into the driving season and the geopolitical picture continues to feed into supply interruption fears. We are still holding our Bull Call Spreads for Crude and Nat Gas.

Financials 

Stocks: This past weeks strength in the stock market came as a surprise for us. Overall I remain bearish. I continue to see signs that this market is just waiting and looking for an excuse to sell off. We recommended an S&P â�,��"free tradeâ�,� put spread idea on Friday to all of our clients. As I mentioned in that trade, 1325 is a significant resistance point on the charts and I do not expect to see this market getting through that resistance in the near term.

Bonds: Bonds continue to hold support above 110 for now. We even managed a head fake above 111. Near term I expect more consolidation ahead of the March 31st Fed. Meeting. Bonds should trade between 112 and 110 until some kind of clearer sign is given off by Mr. Bernanke, but donâ�,��"�t expect much movement until then.

Metals 

Gold spent most of the week consolidating, while silver continued to push higher. Silver is traditionally more volatile than Gold so be ready for some wild moves in the near term if you are a silver trader. I expect to see gold continue to consolidate between 560 and 540. Silver on the other hand I see pulling back near term. A test of support at $10.00 would be the first downside target, after that I do expect to see it follow through until finding strong support near 925 -950. Copper broke out to the upside and is likely to begin a new uptrend. If going long stops should be started out below 230 and then trailed with the daily lows with a 2 day lag. Platinum is building a large coil pattern and I expect big moves from this market are coming soon. Palladium continues to try and catch up with the rest of the group and a move towards 340 seems likely next week.

Grains 

Grains really took it on the chin this past week. Weather concerns were the primary driver. Grains markets are fairly sensitive to the dollar and inversely related. Since the dollar started sliding we have yet to see grains react with any kind of rally. I am not surprised by this at all; there is usually a lag between the movement in the dollar and the reaction in grains. This week if the Dollar remains low look for an upward reaction in grains. This may not turn out to be a huge rally but enough to stabilize the complex. Derek Frey 3/17/2006

Meats 

Live Cattle broke to new lows this week and found a few buyers for the short term. I donâ�,��"�t see this recent bounce holding into next week Expect to see a quick short squeeze in the beginning of the week followed by a move back to the downside. Sell bounces to 8400.

Hogs also found a new low but I think the squeeze may be closer to done in this market. We are taking a short position on the front month here.

Softs 

Well my OJ stop held and I remain long. Stop is now working at my entry point of 135.25. This current breakout could easily carry us to 150 in the near term so hang on. Cocoa again failed to follow through (I feel like a broke record on this one!) Sell above 1500 and work stops above 1535 with a down side target of 1420. Coffee cannot seem to turn the tide back around. I am now on the sidelines in this market and will remain here until a better setup presents itself. Sugar continues to trend lower and I do expect a move below 16 in the near term. Cotton continues to struggle to get a rally going. I expect support around 54 to hold in the near term and a move towards 58 over the next 30 days seem possible if not likely.

Currencies 

EUR/USD: The Euro had a great week. My target of 121.50 was not only hit but exceeded! Near term however, I do not expect this strength to continue next week. Look for a consolidation at best, we may reverse and retest 121 or ever 120 so be warned. I have exited my longs and am now flat over the weekend.

USD/CHF: The swissy never got back to 132 for my short entry but I did enter the short side on a momentum trade when it broke below 131. I remain short with a 75 pip trailing stop that is currently at 130.00.

GBP/USD: I was stopped out of my short trade almost before I got into the office. I ignored my buy signals later in the morning and missed much of the move this week. Significant resistance lies at 1.7600 so here much like the Euro look for a stall or even a fall in the near term.

USD/JPY: Got stopped out for a loss and then stayed out of the Yen the rest of the week. I will look to buy long early next week with a tight stop just below the March 1st lows.

AUD/USD: Got stopped out and here too stood aside for the rest of the week. I will look to buy long below .7250 with stops 50 pips below.

USD/CAD: The Canadian has struggled to stay above 116 lately. Given the weakness we have seen in the Ausi can the Canadian be much further behind?

Risk Disclaimer 
Past performance is not indicative of future results. Trading futures and options is not suitable for everyone. There is a substantial risk of loss in trading futures and options. 

Matt Odom is the Managing Partner and Energy Analyst and Derek Frey is Head Trader at Odom & Frey Futures & Options.