Energies
Thereââ,¬â"¢s nothing like a good I told you so in the face of WWIII and in the midst of hurricane season, but $78 looks like the short term top and call premiums crumbled all week as the energy complex slumped back.  While the market appears setup to consolidate ahead of the next big news event, the general idea that Israel sent in ground troops (despite the PR use of the word ââ,¬Ëœlimitedââ,¬â"¢) spells increasing geopolitical concern in the energy complex.  Is it enough to set a fresh high?  The world is on standby and either Israel walks away without a full scale invasion or Iran steps in and the M.E. goes into full scale war.  I would cover my bear put spreads and short calls for a nice profit if you havenââ,¬â"¢t already, and play a wait and see for a few days or slap on a long condor spread.  Rumblings off the coast of Africa suggest that we may be in for a rough few weeks of hurricane issues.  While the Gulf is the focus, hurricanes are still hurricanes, so buy unleaded and sell heating oil (again) plus some long natural gas calls are not such a bad volatility play.

Financials
The stock market bounced as anticipated, but the quick failure sets up another buying opportunity to play a move to about 1275 on the S&P.  The market is in super consolidation until we break below 1229 and that means sell option premium all day long (just be careful on the exposure on the put side).  Bonds continued to show strength both on a flight to quality basis but also on the positive Bernanke testimony and benign Fed minutes.  Wouldnââ,¬â"¢t it be hysterical if, after all this excessive analysis, Bernanke raises a couple of more times?  Greenspan used to be overly sensitive to giving the market what they wanted to hear, and just before a policy shift he would give the signal.  Something tells me Bernanke is no Greenspan and he might just want a buffer in the 30yr rates and a supportive stock market even if another hike is coming next month.  He has a whole month of data to play off of and the market is reading way too much into the hype.  Short bond futures between 108-10 and 108-16 and buy puts on the cheap here.  The dollar strength could not follow through this week, but this is by no means a bear indicator.  Look for a strong dollar breakout over the next two to three weeks with a move to 90 in short order.  This is just the bounce in the euro I wanted to see to get short.  The Canadian is certainly trying to follow my breakdown prediction but the market should be at 85 in a couple of weeks if the momentum is really there, otherwise I might be getting faked out here.  This means you can buy some August 87 puts for $150-$200 or a ratio breakout spread (sell 1 88 put and buy 4 87 puts for free) and play for the home run.

Grains
Beans and corn failed miserably this week as mixed weather gave the funds an excuse to bail out of a summer rally.  Wheat held up as the market is in a gloom and doom crop scenario.  Keep in mind wheat is a substitutive commodity and there is a limit to the divergence this market can have from corn.  A good corn crop means wheat under 4.50, but any issues with the crop gives the green light to wheat speculators to run that market to $5 or higher.  The play here is to buy Dec. wheat futures and buy Dec. corn 240 puts (2 to 5 ratio), but be patient and look for a good entry point this week.

Meats
Cattle prices stabilized after looking like a screaming sell a couple of weeks ago, but hopefully my bears held strong as Fridayââ,¬â"¢s cattle on feed was about as ugly as it gets.  The market tends to under react to reports like this, but these were the second highest inventory levels since 1996 and way off from the whisper numbers.  If we get a slow start to the expected plunge on Monday then jump on some puts and play the delayed reaction as a second chance to get in.  Hogs, on the other hand got a somber inventory report and could reverse my bearish outlook, but I will play a wait and see for market support before playing this market.

Metals
Gold and silver pulled back a bit as a slightly deflated geopolitical premium and U.S. dollar strength were keys to the market retracement.  Keep in mind that gold (and for the most part the whole metals complex) is up some 20% in a month and was extremely overbought.  They suckered the specs out and then pulled them back in - now a pullback to at least $600 seems like the logical next step.  All eyes are on the Middle East.

Softs
OJ canââ,¬â"¢t seem to get its legs back after a stunning two day knockout blow, but bulls should see this as the first real opportunity to reinforce a long play at a value since 120.  Nov. 200 calls offer a great risk to reward and activity off the coast of Africa says now is the right time.  Cold storage juice numbers are down 29% from a year ago.  Coffee prices are at a contract low price that hasnââ,¬â"¢t been seen since Nov. of 2004.  In this market, in the middle of frost season, this means expanded volatility.  Buy long September coffee strangles now, otherwise the best volatility play in coffee I have seen in years will pass you by.  Cocoa prices melted away as heavy sell volume led to a two day meltdown of epic proportions.  You would think the rebels handed in their guns and the disarmament treaty in the Ivory Coast was successful (a requirement for the country to move forward with elections), or maybe they won the World Cup and I missed it.  No, the analysts say  this was a sell off attributed to a strong dollar and profit taking?  Come on already!  Buy this market with a fury, especially on a break through 1550.  Cotton is getting some weather support in W. Texas, but to me this is a put buying opportunity.  Sorry to all those pundits looking for an epic cotton rally ââ,¬â€œ I just think you are a year too early.  Sugar prices continue to be choppy and weak.  You can buy 13 strike Oct. puts so cheap it will feel like they are paying you to take them.

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.