Financials 
Stocks: The channel that I mentioned last week is still very much in tact. The range continues to widen which should be a sign that this market is about to roll over. Last week I recommended shorting above 1320 with stops above 1331. Any of you who took that advice should have done well. This week I recommend the same trade. I continue to expect a rather dramatic fall in the not too distant future.

Bonds: Bonds look to have found the bottom and I continue to expect a bounce above at least 108 in the near term. This weeks low coincides with long term trend line support that you can see on the monthly chart if you connect the lows going all the way back to 1999. This should set the stage for a solid bounce in Bonds over the next few weeks.

Energies
The correction in the Crude Oil futures market finally began this week but now everyone is wondering; is it over already? By my estimation we still have a few dollars to correct to the downside before we think about climbing to the new psychological upside target of $80.00 We may not see this correction in the next week as the international issues seem to keep stealing the headlines week after week. This â�,��"geo- politicalâ�,� (the new catchphrase) focus has many traders ignoring some of the latest news on the domestic front unless itâ�,��"�s bad of course.

The latest DOE report showed that inventories for Crude Oil and Unleaded declined less than analysts expected and both are in the upper end of the ten year spectrum. The big number to watch in my view is the Gasoline output which jumped to a two month high of 8.5 million barrels a day. This is a sign that the refineries are finishing up their seasonal turnarounds from heating oil to Unleaded production.

President Bush jumped on the seen a little late in my view but nevertheless heâ�,��"�s in. He basically gave the refineries the ability to ignore the mandated switch to ethanol as an additive and called on the Governors to come together and find a common blend that could be used in each of their States. He also suspended the deposits into the SPR indefinitely which is a drop in the bucket compared to overall consumption. This is viewed more as symbolism than substance but nevertheless is seen as a move that could help the psychology of the energy market make the shift to selling rallies instead of buying dips.

Iran obviously has the ability to ruin this domestic Kumbaya and it looks like they are doing everything in their power to make that happen. The IAEA reported to the U.N. on Friday that Iran is enriching uranium and is continuing related activities in defiance of the council (no kidding?). The big question here is whether or not anyone would even dream of sanctions on Iranian oil or if Tehran would consider stopping exports in protest. These are big â�,��"ifâ�,��"�sâ�,� and only time will tell what the outcome will be in this face off.

In the meantime we are maintaining our put option position in Crude Oil. I am still expecting the market to retrace further to the 65.00 â�,�“ 67.00 over the next couple of weeks before we can expect a move higher. With international affairs in their current state, driving season and hurricane season on the way I have to remain the longer term bull.

Natural Gas did not follow through on its promising move to the upside but rather it crashed through support below 7.000 and didnâ�,��"�t stop until it reached a one year low of 6.555. Now Iâ�,��"�m still not convinced that this isnâ�,��"�t a shakeout down here but if I were trading futures contracts I would have been stopped out early in the week. Unless prices soar early on next week we will be salvaging the premium thatâ�,��"�s left in our most recent natural gas option spreads.

Metals 
What a wild week in metals. These past two weeks have been the biggest days we have had in metals since the early 1980â�,��"�s when the Hunt Brothers were trying to corner the market. This volatility is not expected to decrease anytime soon so I must continue to advise caution. The path of least resistance continues to be up so for now those of you who are brave enough to trade these markets should be biased to the long side. I would tell you to keep your stops tight but average daily range is so much higher than the norm that running tight stops at this point is almost a sure path to losses. I must advocate using options to mange your risk during these periods of high volatility. Long futures with long puts instead of stops are the â�,��"safestâ�,� way to trade these markets.

Grains
Grains ended the week with a bit of a bang, mostly due to weather concerns going into next week. I would argue that longer term you are beginning to see these markets adjust to the falling dollar. Remember we export much of the grain produced here in the US and grains therefore have an inverse relationship to the dollar. Overall I am expecting the grains to being to heat up. They have been one of the laggards in the overall rise in commodities that we have seen over the past few years and it could be time for them to begin to play catch up. I would favor Corn, Wheat and Soybean Oil over the other grains for the time being.

Softs
OJ continues to consolidate itself between 145 and 140 more or less. Support at 140 seems stronger than originally anticipated, however I still expect more of a pullback in the near term. A move back to 135 seems very much in the cards. Cocoa is finally trying to move up but may stall along the way. I just recommended a long call trade in Cocoa using the August options. Coffee had a wild week but did bounce off of the rising trend line support level. Longs at or near 110 with stops below 106 are the best trade going right now. Sugar pulled back below 17 cents briefly but ended the week with a rally back above 17. Short term I expect a run back above 18. Longer term I am not convinced that the current consolidation has run its course. I expect to see a range bound market here for some time. Cotton has struggled to find a bottom but I expect that we have found support here and should see this market begin to bounce back towards the upper end of the range.

Meats
Support held once again for Live Cattle and weâ�,��"�re still calling this a buy down here. While the supply numbers have remained healthy so has demand and it continues to grow into the spring. Live Cattle is a buy down here unless we break through support.

Lean Hogs blew through two points of resistance and closed just a few cents from their high of the week. Expect a pull back and some consolidation here which is necessary if this market plans to take a stab at the trendline resistance on the weekly chart. However, if this resistance is broken we are definitely jumping into the long side. Buy any break above 70.00 on the June contract.

Forex Currencies
EUR/USD: What a week in currencies. The Dollarâ�,��"�s breakdown has been nothing short of a blood bath. The strength we saw this past week is not likely to continue. While we did breakout I do not expect this market to be a runaway train like silver or copper. Longs are advised to tighten stops up and shorts should get ready to pounce. Look for this market to fall back towards 125 near term.

USD/CHF: Last week I mentioned that we could see the breakdown that we have now seen here. Support at 125 did not hold which was no great surprise. I would expect support at 1.2250 to hold this week so shorts can use that as a target and longs could use that as an entry point.

GBP/USD: The cable was amazingly strong this week but much like the Euro I do not see much follow through here next week. Aggressive traders could go short with stops above 1.83.

USD/JPY: This market really fell hard. It did break decisively out of the 116-119 range we had been trading in for much of the year. We are quickly approaching support at 113.50 and aggressive trader could buy with stops below that support level.

AUD/USD: The Ausi is about to break out of the descending channel on the weekly charts. It is too early to say if this is real or just a head fake but if we maintain a move above 76 for three or more days I would then be inclined to call this move real.

USD/CAD: My expectation that support would hold last week proved to be dead wrong. We are approaching a long term support from back in 1991-1992 and I would expect a bounce off of support here in the near term.

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.