Energies
Crude recouped some of the losses from an extremely bearish open to the week, and overall is building some interesting technicals on a daily chart.  I remain short term bullish and look for a bull breakout to occur in the next two weeks.  If we break $68.10 on the August contract this market turns technically bearish.  Keep an eye on the possible launch of a long range missile out of North Korea and a major increase in violence in Iraq to be political concerns and a catalyst for the move higher.  Natural caught a nice spike higher on news of worse than expected inventory levels, and could be a volatility play over the next few weeks.  Long unleaded versus short heating oil is still the right move until the crude price target ($78) is hit. 

Financials
After failing below critical support (again), the stock market offered one of the biggest percentage two day rallies in recent history (nearly 3% on the S&P).  Overall the average daily volatility has increased so much so that it is difficult to assess the significance of such a large move, but the overall strength created by the two day move should have some staying power.  I remain steadfast in the belief that the market is establishing an intermediate term range, likely between 1200 and 1300 on the S&P that should last the better part of the remainder of ââ,¬â"¢06.  Bonds developed a potential top, but lack of momentum to the downside should make for an interesting start to next week.  We could easily see 104 on the 30yr. before the June 28th meeting if the market gets some momentum to start the week.  There is very little justification, given the factoring in of over a 100% likelihood of a Ã,¼ point hike on the short term t-bills, for the market to develop price support heading into the meeting.  The dollar continues to suggest strength and therefore weakness in the euro, yen and Canadian, but the choppy action suggests option plays to avoid the volatility exposure.

Grains
Weakness in corn persisted this week as a continued decline in positive PR for ethanol production has funds heading for the exits.  Beans remain somewhat supportive, and possibly reestablishing itself as the leader in the grain complex.  Wheat has a ââ,¬Ëœthe good news is already outââ,¬â"¢ feel to this current decline.  Weather is still dominant, making long calls the right volatility play for the next couple of months.  Take advantage of the recent decline in volatility premium in wheat and bean calls and load up.  Rice is already on the move.

Meats
Cattle prices spiked higher this week and is offering an excellent bear put play at these prices.  Hogs look a bit more bullish but I am happy to walk away from long plays at these prices.

Metals
Gold self-destructed this week and appears to have washed out a lot of long specs.  The bounce at the end of the week is meaningless in the whole scheme of this move.  Gold will likely fail once more before finding a legitimate support area.  The market has to get above $650 and really to fresh highs to resume a bullish pattern, and a pennant over the next couple of days would setup a failure to new near term lows and bring silver along for the ride.  Anyone notice the 25% failure in copper?  It is just the beginning in that market.

Softs
The first potential Florida hurricane scare came and went with little to no impact on prices, other than to heighten awareness and bring in some sucker spec buying and short covering ââ,¬â€œ a sign of the kinds of price action that might occur if and when the real thing hits.  Coffee is developing consolidation ahead of a bull run ââ,¬â€œ Sept. bull call spreads recommended.  Cotton prices are long term consolidating but I have to bet against the analysts and suggest put plays for October options.  Cocoa is on the move higher.  Sugar prices rebounded a bit after strong selling, but volatility is so high that we could be at fresh lows in a day ââ,¬â€œ stick to long strangle plays and watch volatility run its course.

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.