Forex Currencies

EUR/USD: The Euro bounced last week and I expect to see follow through this week. First target is 122.

USD/CHF: I am currently favoring the short side of this pair on any move above 131.

GBP/USD: The cable should hold support above 172.50 so any long trades entered below 173 should fair well by the end of the week.

USD/JPY: Still stuck in a range between 116-119 more or less. Continue to range trade by selling the high side of the range and buying the low side as we approach those extremes.

AUD/USD: So far support below 70 has held and I expect it to continue to hold up this week. I am not long and would not chase this market higher if it does continue because overall this market is likely to drift more than trend in th4e near term.

USD/CAD: The Canadian has rallied to new highs. Look for this breakout to carry this pair for at least another 150 pips this week.

Financials 
 
Stocks: The S&P has managed to stay above 1300 more or less thus far. I continue to expect this support level to be taken out and slide towards 1275 from there. Overall look for weakness across the board in the stock market this week.

Bonds: Bonds sold off after getting wind that Mr. Bernanke may be more of an inflation hawk than we originally thought. On a weekly chart one can clearly see a double bottom forming, but the real question is will that bottom hold. Personally I do not expect current support levels in bonds to hold and I see a continued sell off here as well. Look for bonds to â�,��"grindâ�,� lower over then next few weeks.

Energies 
 
Last week finally gave Crude Oil the break out momentum needed to push through resistance and ended a seven week period of range bound trading. After breaking through 6558 on Tuesday the May contract continued to show strength as it traded as high as 6715 on Thursday before finally cooling by 52 cents on Fridays close. Unleaded and Heating Oil were the primary drivers of the market as inventories continued to report draws but remain in the extreme upper band of the 5 year average. Historic averages are not helping too much because demand for Unleaded is coming on strong for this time of the year while refineries are in their seasonal switchover mode. This could get much worse before it gets better and I expect it will. We are continuing to hold our 6750 to 7000 option spread at least through this week.

Natural Gas started out strong but eventually gave up its gains on Friday. We should see the market break through 765 over the next couple of weeks. Our Natural Gas Ladder Spread expired .01 away from the max profit target however the exit proved a bit tricky and ate up another .07 by time it was all over. Nevertheless we were very happy with that outcome and we are rolling into anther spread of the same construction for May.

Metals 
 
Metals exploded to the upside. I see this as the beginning of the next leg up. However, this next leg is not likely to be an easy climb. Expect volatility to continue to increase as we go forward. Early this week we may see a consolidation but overall I expect to see strength in metals.

Grains 

Fridayâ�,��"�s report moved grains in both directions. Beans fell down to support while corn rallied back up towards resistance. I would not read too much into Fridayâ�,��"�s reaction to the reports. The market needs to confirm Fridayâ�,��"�s reaction by following through early this week. Grains seem to have a habit of not following through much so far this year so be forewarned that we may fail here early this week again. Aggressive traders could â�,��"fadeâ�,� Fridayâ�,��"�s reaction with tight stop and reverse orders.

Softs 

OJ continues to be strong and I still expect to test 150 near term. We could be seeing signs of a slightly overbought market on the horizon so tighten up your stops if you havenâ�,��"�t already. Cocoa is starting to look like a buy but I have seen this market fail to breakout so many times I must admit to being quite leary of buying or selling for that matter, but DMI has issued a buy signal on the daily charts. A move above 1550 would confirm this initial signal. Coffee is making an attempt a reversing the down trend, CCI, DMI, and Slow stochastics have all issued buy signals in the last week or so. These are three of the indicators I prefer the most so I must not ignore them and go long coffee this week. Any close above 110 on the May contract would confirm these signals. Sugar reversed and pushed back towards prior highs last week. Sugar was unable to break out so far above those highs so aggressive traders could â�,��"fadeâ�,� this market as well by shorting at the current price with stop and reverse or just plain stop orders above 1875. Cotton has made a classic double bottom and is trying to support out off of that bottom. A close above 5550 on the July contract is needed to confirm that the bottom is really in.

Meats 

Once again the Live Cattle market failed to rally last week but rather continued to break down towards our downward target of 7700 as it ended trading on Friday at 7950. The June contract has already broke through trendline support on the monthly and could be a sign that the April contract will not find support when it gets there. However, I am still recommending a long position from 7750 with stops below 7600 on the April contract. The Hogs continued to consolidate in a tighter range last week and this should continue until the market breaks below 5500.

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

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.