Financials
Stocks: Stocks drifted mostly lower on the week. This market has been quite boring I must say, but we are likely to see an increase in volatility in the near term. Short term I am neutral, but longer term I remain quite bearish. I have not been very active in the indexes because I just havenââ,¬â"¢t gotten many very strong signals in either direction for some time now. However I do not expect this trend to continue for much longer.

Bonds: Bonds continued lower all week and are quickly approaching solid support. I expect to see this market begin a very strong bounce in the near term. Bonds could bounce back to 109-110 quite easily.

Energies 
Iââ,¬â"¢m not admitting defeat on this one but I may have called the break through 7000 just a little prematurely. This being a long weekend and with the feverish pitch of the rhetoric abroad (Iran, Nigeria and Venezuela in particular) I fully expected the Crude Oil market to have all the momentum necessary to break to new highs. Instead we saw profit taking dictate a soft market on Wednesday and Thursday until strong buyers came in late in the day on Thursday to rally the market ahead of the long weekend. I expect to see this market remain comparatively timid as we head into the beginning of next week unless we hear more bad news from our associates in Iran or elsewhere.

If the world would just stand still for a couple of weeks then we would probably see a softening energy market. But the likelihood keeping a lid on all of the geo political situations at the same time is almost zero. Iââ,¬â"¢m also very concerned that the Unleaded and Distillate inventories are going to continue to decline as we head into the driving season and this is obviously going to be supportive for the complex as we move forward. So my near term outlook for Crude Oil is that we will see the market come on soft in the beginning of the week and with any bad news, begin to rally back towards resistance by weeks end. We exited all of our May Crude Oil Bull Call Spreads for 1.10 on Thursday. Needless to say we were very happy with that fill.

Also of note, the Natural Gas market is seriously oversold here and as soon as the A/C units start humming in the Midwest this coming week I think we will start to see the market begin to trend upward once again.

Metals 
Metal mania continues! We ended the week near the highs. However we did fall short of breaking out above them. I see this as a key sign. I expect a pullback from this past weekââ,¬â"¢s highs in the near term. We are likely to call this past week a double top in silver after the benefit of some hindsight. Copper continues as the run away bull. Here too a pullback is likely in the near term. I am not simply trying to call a top here, but rather my models are what tell me that these markets are a bit ahead of themselves. Bulls be warned and bears be ready.

Grains 
Grains spent the week trying to hold support. Beans were able to stabilize but corn began to turn lower in the ladder half of the week. Wheat was the strongest of the group. So far none of the moves we have seen have been very inspiring. But over all these markets remain a buy.

Softs 
Shorting OJ at 150 is working great so far. Move stops to at least your entry point if not lower and continue to trail this market. A move below 134 is the first target. Aggressive traders could put longs on at the current price. Cocoa has been in a range for almost all of 2006 and we are now near the lower end of that range making this market a buy. Coffee is still a long term buy but near term this market remains tired. Sugar is running back towards support and could continue lower for some time. Cotton has confirmed the bottom and is now poised to make an attempt at a run towards 60.

Meats 
This reversal almost smells too good to be true in Live Cattle. Watch out for falling knives if this turns out to be a fake going into next month's contract. Key resistance for this market is setting up at 8400 for the front month and would be the spot to get long or short this market with fairly tight stop placement.

We finally got a bounce out of Lean Hogs as we rolled to the next contract. This market seems ready to hold it's support from the monthly chart. Buy dips with protective sell stops below 6750.

Forex Currencies
EUR/USD: Overall I expect the Euro to gain against the Dollar. We continue to struggle with a waffling dollar. Once the trend in the dollar turns lower then we will see solid gains in the Euro.

USD/CHF: I continue to favor the short side. For now I am on the sidelines here but again any move above 131 would be cause for a new short.

GBP/USD: The cable continues to fight with resistance at 176. I expect to see this level broken through in the not too distant future.

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: Buy the current market as the pullback I mentioned last week has run its course.

USD/CAD: This market could reverse the overall down trend, if we are not careful. Any move to 116 would confirm.

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.