Financials 
Stocks: The Dow continues to try and bait in the dumb money. This is a classic distribution for any of you who have read Ted Warrens book. I have been a bear of this market for some time now, in that time we have seen stocks make new highs, but I maintain that this is a setup for a larger fall. Part of this â�,��"rallyâ�,� is being engineered for political reasons. Again if you think politics do not enter into the market you are really kidding yourself. After the election, the need to prop up this market will subside and we will see this market begin a new bear phase that will make the 2001 correction look like the good old days.

Bonds: Bonds really took it on the chin on Friday. This should be the beginning of a new bearish phase in bonds going forward. No amount of smoke and mirrors can hide reality for much longer. The reality is simply that fiscal irresponsibility should not and will not be rewarded. I am very bearish bonds even while I am bearish stocks which I know some of you will point out as contradictory, but from where I sit the path of least resistance for both stocks and bonds in the near term is down. Look for bonds to fall back to support at or near 110 this coming week.

Metals
Metals are trying to stabilize but continue to struggle. We will likely see this market drift sideways in the near term. I am a mild but not wild bull of metals at this time. Gold should be range bound between 575 and 600 this coming week while silver should find its happy place hovering around the 11.50 level. It is still too early to say that the correction in metals is over but we are getting closer to that point not farther away.

Grains
Grain had a wild week but ended the week like a lamb instead of a lion. I have been bullish grains for some time now and we are finally now seeing those bets pay off. We will be exiting our long corn trades this week while at the same time staying with our long soy meal trades. Look for corn to begin to correct back towards 250 this week. Wheat too has come too far too fast and is now a fade. The first clue to this should be the boiling over of volume on the daily charts. Bottom line here is stay long the soy complex against short wheat and corn over the near term.

Softs
OJ has all but hit my 160 target and I am now targeting a move to strong support that lies at about 140. It could take the better part of this month to get there but that is where my maps say this market is going. Cocoa continues the sideways shuffle for now. I love this market and very badly want to trade it but I learned long ago to never try and force a trade so I will remain on the sidelines in cocoa until something, anything even, develops. Coffee cannot seem to get out of its own way. The biggest thing I see in coffee is the ever tightening range. If you look at a daily chart you should be able to clearly see that we are creating a tightening coil which is almost always a precursor to a breakout. I continue to be biased to the upside in coffee. Sugar continues to drift lower although the pace is slowing and I feel we are very close to a bottom. Look for some stabilization this coming week. Aggressive traders could go long with stops below this weeks low. Cotton continues to sell off and for now I see little in this pit to do other than yawn.

Meats
October live cattle continued their aimless drift this week, unable to break the recent range. I am still recommending clients straddle 90 on the December contract. It seems like feeder cattle may have found a near term bottom, although I am closely watching the grain complex and if the strength from earlier this week can continue I would short the Dec FC near 111.80. After we legged out of the 62 puts from our spread two weeks ago, we closed out the remaining 58â�,��"�s the market stalled just below 62. Look for continued weakness if sellers can take us below 59.25

Energy
The energy markets have begun to stabilize and consolidate in the 58-62 range that I mentioned a few weeks ago. Look for 58 to hold as support this week and look for 62 to hold as resistance. We will likely see OPEC announce a production cut this coming week but that is all but already priced in so the only way we see a move outside of that range is if they either do not cut production or cut production by more than the 1 million barrel we have already heard about. This market is going to get very choppy so be warned.

Forex Currencies

EUR/USD 
This pair has been chopping quite a bit lately, bouncing between short-term technical levels without any real direction. However, we finally caught a glimpse of the underlying sentiment on Friday morning when the stateside non-farm payrolls came in below expectations. The break pushed down through substantial support @ 1.2650 and I expect the move to continue lower based on technical selling. Support @ 1.25 is my near term target and if and when we get there I would consider going long below 1.2485 with a stop below @ 1.2459 trying to catch a short covering bounce.

USD/CHF 
The resistance between 1.25 & 1.2550 was finally broken on Friday morning after the NFP report hit the wires. The longer term picture for this pair remains bullish, though I would look for some type of pullback to test support @ 1.2550-65 before going long. There is a lot to be said for being patient and waiting for a good entry rather than chasing a breakout.

GBP/USD 
The cable started the week off strong only to stall, reverse, and end the week essentially where it began. The doji on Wednesday gave traders a bit of warning before the reversal but once again the pair seems unable to commit. At this point I would watch the 1.8650 level very closely; if we break down through that level I would go short targeting 1.8475 in the near term. Near term resistance @ 1.8875 from last weeks high.

USD/JPY 
Once again, the NFP report provided yet another pair with the strength needed to move through significant resistance. After surging through our 118.25 resistance level this pair never looked back, closing just off the highs above 119. I expect this strength to continue and I am already long @ 118.32, trailing my stop a bit wider on this one due to the longer term potential.

AUD/USD 
The short trade I recommended last week worked out quite well as we capitalized on the obvious resistance @ .7500. I would advise those traders who have not yet taken profits to tighten your stops as we approach .7400 on the downside. At some point I do expect a brief reversal to test .7500 yet again, though I would reenter on the short side if we break below .7400.

USD/CAD 
After a brief head-fake on Monday, this pair was able to push up through the resistance @ 1.1225. I hope that those traders who went long on that push tightened their stops as the pair approached the 1.13 level we were targeting, as we were all the way back to 1.12 intraday Friday. Examples such as this reiterate how important it is to take profits off the table while you can. I still believe we may be seeing the beginnings of a long term uptrend, and will closely watch for a sustained move above 1.13 as confirmation.

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.