Energies
A choppy energy market this week showed resilience with solid recoveries from a couple of morning selloffs.  Overall the market is offering price resistance well below contract highs and, given the current fundamental structure, is highly reliant on near term unleaded gas inventory reports to force a reversal in the market.  Look to shift focus to bear put spreads in unleaded gas to play this now sector leading market to reverse its pattern.  The short term draw downs in inventories is likely short lived as the ramp up into summer driving season is sufficiently handled by suppliers.  Long natural gas as a hedge against a short unleaded or crude play is recommended on the futures side.

Financials
The stock market shocked itself back to reality today after a solid employment number created intraday volatility and a market plunge after failing to breakthrough the pre-open highs.  This is a significant day and one that will likely break the market as any move to sub-1300 prices will create even more bear momentum.  Bonds melted away as expected but is short term oversold and I am a buyer at 107 on the 30yr. should it get down there ââ,¬â€œ despite the fact that it is likely headed to 102 in the next 12-18 months.  The euroââ,¬â"¢s failure near the 124 highs is a good sign the currency market may be volatile but lacks the fundamental structure to breakout in either direction.  The ECBââ,¬â"¢s move to hike rates on Thursday shows there is little to separate the dollar from the euro as neither monetary policy is differentiating itself.  When policy shifts occur or economic strength establishes itself for one economy but not the other, then a currency shift will take place ââ,¬â€œ although that is not to say the currency shift wonââ,¬â"¢t happen ahead of the shift in anticipation if the signs are there.  In my contrarian view, the dollar will ultimately rally to new highs, but this could be 6 to 12 months away.  The Canadian is only a sell if we break through 85.

Grains
Beans continue to fail as expected and wheat supports, but I am dumbfounded as to the resilience of the corn market.  Is it possible the ridiculous PR efforts of the government to promote corn as the ethanol and energy crisis solution might actually be pushing this market higher?  Granted, the acreage report was positive, but pleaseââ,¬Â¦if the crop doesnââ,¬â"¢t burn we will be bathing in corn come winter.  The chart setup is quite bullish and I suggest a wait and see for resistance to develop, but overall the corn market is getting way ahead of itself.  Beans would be a value buy around $5.40 ââ,¬â€œ long term.

Meats
The bloodbath continued this week in the meat complex, displaced a little by a late Friday option expiration rally in live cattle.  The hog market eventually collapsed as a delayed reaction to the quarterly report from last Friday, and broke through critical contract low support on Friday.  I am a bit suspect here though as the broken support did not hold on the close and the market could have suckered people in and show some strength next week.  On a gut play technical move I recommend long hogs with a double stop reversal below todayââ,¬â"¢s low.  Cattle is long overdue for a dead cat bounce and this week may be just that.  I would also recommend a long play here with a double stop reversal below Fridayââ,¬â"¢s lows.

Metals
Gold and silver surged once again this week, with gold breaking through $600/oz, acting like it was heading to $1,000.  Silver showed even more impressive support as todayââ,¬â"¢s retracement in gold and the currency reversal did little to stop silverââ,¬â"¢s move.  Silver ratio credit spreads (buy 1 ATM/sell 3 OTM) is a dangerous but incredible opportunity to collect some seriously excessive OTM call premiums.  Copper is at a great point to buy some puts as it is long overdue for a massive one day bailout of the longs.  Donââ,¬â"¢t play futures, but rather look at selling a May 250 put and buying a July 250 put for a spread cost of about $1,500. 

Softs
OJ continues to push to fresh highs, with skies the limit here.  However, I am still a contrarian put buyer for two reasons ââ,¬â€œ cheap options and a market overdue for a retracement.  Coffee is playing an interesting intraday price game setting up a high begging to be broken at 1.1070 on the May contract.  Buy July 130-150 bull call spreads for $500 and get a risk to reward ratio that would make a home run hitter weak at the knees.  Cotton is choppy and is still a short.  Cocoa is quiet and likely to surge in the next few weeks ââ,¬â€œ buy dirt cheap OTM July call options.  Sugar did just what I was looking for on Friday and made a bull chart look ugly again, but holding at critical trend line support is making me look to next week as the tell all week for this market.  We could easily see support here or a failure to sub 15 prices.  Lumber remains a sell on bounces.

James Mound is the head analyst for www.MoundReport.com, and author of the commodity book 7 Secrets. For a free email subscription to James Mound's Weekend Commodities Review and Trade of the Month, click here.