Financials 
Stocks: The Dow continues to run to new highs grabbing headlines all the way. We have now rallied since July of this year with almost no corrections along the way. I hope by now we all realize that the market is never a one way street for very long so it is not a question of if the Dow will correct but rather when. I continue to believe the when will be immediately after the elections here, if they can even continue to prop this market up that long. This â�,��"rallyâ�,� to new highs has been done on decreasing volume day over day which is not a good sign at all for the Johnny come lately bulls. I continue to accumulate puts on strength and suggest anyone reading this to do the same.

Bonds: Bonds continue to slide and are just above my 110 target from last week. This week I expect bonds will trade in an overall sideways fashion ahead of the FOMC meeting on the 24th of this month. We have strong support just below 110 on the daily charts and will likely hold that level until we get a clearer picture from the Fed. I donâ�,��"�t think anyone really expects the Fed to do anything at this next meeting but we will all be trying to read the tea leaves to guess what the future bias is going into the December meeting.

Metals
Metals continue to recover and in the near term the bull continues to try and come back to life. We need a decisive break out above 12.00 in silver and 600 in gold before we can for sure call the bottom but I do think that we will reach those levels this week. Last week I said I was a mild but not yet wild bull of metals. This week I feel a little more bullish but I am still not a wild bull but will be if the targets I mentioned above are achieved. Copper is a buy with stops below Thursdayâ�,��"�s lows. Target for copper this week is 360.

Grains
Grains had another wild week. We are in the harvest moon phase which is traditionally wild. I continue to like the long side of the soy complex over the other grains. The biggest trade I see on the horizon for the week ahead is the corn wheat spread. The corn wheat spread is an exchange recognized spread which means it comes with a significantly reduced margin requirement. For those who donâ�,��"�t know what I mean by the corn wheat spread it is simply going long March of 2007 CBOT corn and at the same time on the same ticket shorting March of 2007 CBOT wheat. This does not mean that I think corn is going up and wheat is coming down though that may very well be what happens. What it means is that I think the relationship between corn and wheat has gotten very wide and I am simply predicting that it will go back to a more â�,��"normalâ�,� level as we go forward. Oats are a sell with stops above this past week highs.

Softs
OJ caught me and by the look of the chart, almost everyone by surprise. The surprise was not the report itself, because I think we all knew that the OJ crop has been severely hurt by both the 2004 and 2005 hurricane season, but the reaction to the report was the stuff of trading legends. I luckily had covered my short the day before and did not give back all my profit in one day like so many other shorts did. For now I will stand aside OJ as this market is so thin that shocks like this tend to have a lasting affect on the trade for the next week or two as many traders lick their wounds. Cocoa had a down side break out that so far has failed to follow through. I am going to go long on Monday with stops at 1389 to start. I am now very bullish coffee and just sent out a bull call spread trade recommendation to every one so take a look at that if you havenâ�,��"�t already. Sugar continues to struggle but if energy can stabilize then I think sugar will follow suit. I am mildly bullish sugar although I do not see huge moves hear in the near term in any direction. Cotton is trying to find a bottom but I remain unconvinced and will continue to trade elsewhere for now.

Meats
The inverse relationship between Feeder Cattle and the grains became very clear this week. The short play I mentioned last week worked out quite well, though I would recommend that any traders still holding that trade take profits off the table. I do expect a bounce in Feeder Cattle(via a short term pullback in grains) and would suggest buying the Nov 108 calls for a quick trade. Live Cattle have faired a bit better in than the feeder, though we need some strong moves to get our Dec 90 straddle profitable. December Lean Hogs finally supported out @ 59 and closed out the week in the middle of their range. If we can push through 62 expect a quick rally, otherwise I am looking to fill the gap near 60.

Energy
Energy did in fact support out in the area I expected and mentioned last week. I see the market rallying to $60.00 in the early part of next week. However I continue to believe that in the medium term 58-62 will more or less be the range that crude stays in. This market needs to consolidate for a few weeks if not months before we see the beginning of the next trend. Heating oil could finally move above 175 this coming week. We are still targeting a move towards 185 this week. Natural gas continues to wear traders out and for now I will explore opportunities in other markets.

Forex Currencies

EUR/USD 
Last week I mentioned the underlying bearish sentiment of this pair and this week we saw the sellers follow through. On Friday afternoon I was filled @ 1.2485 on the long trade I outlined last week with my stop @ 1.2459. I remain cautious ahead of next weekâ�,��"�s numbers and therefore I would tighten my stops and trail them if we can get through 1.2580. There is some substantial support near 1.2480 and resistance @ 1.2670 & 1.2740. Sell a break below 1.2450 with 40 pip trailing stops targeting 1.2328.

USD/CHF 
The pullback from last weekâ�,��"�s breakout never materialized, and thus I am not currently in this pair. I am looking to sell this rally @ 1.2820, though I want to see two failed attempts to push through that level before I am willing to go short. On the downside I expect that 1.2480 should provide support if we pullback, and I would stop and reverse my short position if we get there.

GBP/USD 
This week the cable broke down though the support level I referenced last week and we managed a very nice profit on that trade with clients exiting near 1.8514. I have renewed my intermediate term bullish outlook for the cable; as a result I am actively buying this pair between 1.8510 and 1.8545. In the short term look for resistance @ 1.8645 followed by 1.8775.

USD/JPY 
Last week we went long @ 118.32 with a trailing stop. The macro picture for this pair is looking somewhat uncertain and I expect the data next week to play a key role. With the Japanese economy struggling to expand with extremely low interest rates, this pair is likely to push towards 1.2050- 1.21. As of Friday afternoon we took 1/3 of our long position off the table and will tighten our stops as we approach 1.20. Near term support is @ 118.90 and 118.

AUD/USD 
On Thursday we saw some good strength in the Aussie as a result of some unexpected economic data from down under. There remains some substantial technical resistance between .75 & .7560 for this pair and if we can push through that congestion zone I am looking to go long for a move towards .7680. It remains to be seen what kind of impact the drought in Australia will have on their economy, though I expect we will see the range for this pair expand as the market digests the recent developments.

USD/CAD 
Last week I mentioned my longer term outlook for this pair was turning bullish and I stand by my call. This week we went long this pair as it r pushed through 112.80 & 113 resistance and began taking profits near 113.60 on Friday. I do not expect us to remain in this tight consolidation very long, though I remain somewhat apprehensive due to the resistance @ 114. If we can clear that level, look for a rapid move towards 115.40. If we pullback from the current levels I am looking to go long between 112.60 & 112.90 with stops below 1.1230.

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.