Energies
Choppy action in energies this week occurred despite heightened concerns in the Middle East.  While the risk remains, it is critical to identify that not only has a likely top occurred, but critical support and continued geopolitical unknowns (plus the bonus hurricane shocker) will likely keep the support near $70 in tact and energies will remain in a wide channel.  This allows for collecting some serious OTM option premium as volatility is fairly high.  Natural gas rebounded as a surprisingly low inventory report due mainly to the summer heat wave has sent supplies dropping and prices rallying.  While the exposure is certainly there for a spike to $8-$9 (Sept. contract), the smart play is to collect deep OTM premium while you can.

Financials
A strong stock market, due mainly to positive earnings and a stunner of a GDP number this morning, has ended the week approaching critical resistance.  The market should have a hard time breaching the 1290 mark and then 1305 if it should ever get there.  This is a good place to reverse and get short.  Bonds topped at 108-15 today, one tick below critical resistance.  This is a great short from here with stops above 110 (you could run a short term tight stop at 108-21).  The dollar slumped back but the euro is well beneath several resistance points, suggesting this is a good time to buy Sept. 125 euro puts.  The Canadian is taking too long to fail in order to keep momentum, but remains bearish.

Grains
Grains were weak across the board as benign weather is making traders second guess a summer rally with time dwindling down to harvest and the peak weather period coming to an end.  The corn crop is better than the whispers, but the wheat crop is devastated.  This means play long wheat against short corn (2 to 5) or look at last weekââ,¬â"¢s WCR for other ideas.

Meats
A good bear break off the ugly cattle on feed numbers from last Friday should have sent meats to zero, but solid price support is showing just how strong the bull market sentiment is.  I remain a put buyer and a break below 81.95 (Aug.) should send the market plummeting.  A break above 69.40 on Aug. hogs and the chart turns bullish.

Metals
Choppy gold action still showed strength as the dollar weakness pushed this market back up towards the highs.  Be a put buyer here, not only because itââ,¬â"¢s a value but because the market consolidation suggests another leg down next week on a dollar bounce.  If we spike up on Monday look at some 600 puts for October and sell some $750 calls.

Softs
OJ prices surged on an ugly cold storage report (down 29% from last year) and the potential for a Florida hurricane to create one of the most sever shortages in history.  If you went long the Nov. 200 calls I say scale out of half for a solid profit and let the other half ride because a hurricane through the Florida OJ fields means $2 plus prices.  Coffee setup a nice technical double bottom on a daily and should be on its way back to 105 ââ,¬â€œ Monday follow-through is critical to sustain the run.  Cocoa is meandering around 1500 and should make a move to fill the recent gap next week.  Buy Dec. 17 calls.  Cotton is strong on weather, but I remain a put buyer.  Sugar is stumbling and lacks any real momentum.  I am buying up 13 strike Oct. puts as a flyer trade.

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.