Energies
With North Koreaââ,¬â"¢s surprise reversal of position, the market showed strong selling pressure today despite a larger than expected commitment from OPEC to cut production 1.2 million barrels a day.  This market is still seeing strong selling pressure from large funds and institutionals.  The overall sentiment remains bearish despite the threat of conflict with Iran and North Korea.  While I remain a buyer of calls for what should be a move to $68 or higher, the weather and Middle East politics continue to be the driving factors as we head into winter.  The risk to reward of being a long call buyer here continues to make it a worthwhile position.  Natural gas rebounded strongly this week as it has been long overdue for a rally after seeing a 50% drawdown in under two months.  More upside is likely.

Financials
Strength persisted in choppy trade this week, as a negative PPI report was offset by a positive CPI report and the market saw solid earnings throughout the week.  Overall, the stock market has yet to suggest it will break its repetitive pattern that has occurred over the past several years of breaking to new technical highs, suckering in the funds and then failing.  Not surprisingly we saw very strong inflows into mutual funds this week.  With that said, I suggest put plays in the S&P about two months out.  Bonds are congesting near the lows of the recent retracement and are likely to see 108 in short order.  The dollar pulled back a bit and it would not be surprising if we ran down to 85 before resuming the rally.  The US dollar is a bit stuck by being technically bullish but not necessarily wanting to get ahead of itself fundamentally.

Grains
Wheat ran to 5.57 then broke key support on the close today at 5.05.  The problem with short term technicals in grains right now is they are less likely to mean anything than if this was a normal market condition ââ,¬â€œ too much intraday volatility and too many order flow issues.  Monday will be a solid indicator of the trend ââ,¬â€œ a negative close and I am on the bear bandwagon full blast, otherwise a more wait and see approach here.  I have been stockpiling some puts out in March because they are so darn cheap you donââ,¬â"¢t have to be a perfect timer to make some money there.  Rice still looks like a buy to me.  Soybean rust was discovered in Virginia, but it is not thought to be a legitimate threat to this yearââ,¬â"¢s harvest.  This is a long term issue that many will ignore until it is too late, but for now the market is unaffected. 

Meats
Continued weakness in meats heading into todayââ,¬â"¢s cattle on feed is more of a consolidation pattern as the market awaits the report that is following the biggest inventory numbers of all time last month.  Although the interesting part of last monthââ,¬â"¢s report wasnââ,¬â"¢t the bearish numbers but rather the bullish market reaction following the report.  The technicals on cattle are interesting as well.  We have gap resistance on Dec. live cattle at 89.30, but it looks so obvious one might think it is a suckerââ,¬â"¢s stop and the right stop is probably 91.40, making a put play a better risk to reward ratio than a futures with a stop that far away.

Metals
Silver broke above $12 but then crude broke to fresh lows bringing silver back below what should now have been support.  A 12.16 close in silver on Thursday meant  a thorough break of 50% retracement resistance and a break to a fresh retracement high above 11.87.  It also should have pulled gold and been a leading indicator to a crude oil rally.  Instead we settle back down below $12 and crude sets a fresh low, suggesting a bear turn in the market.  One day does not make the trend, so another close above $12 is needed to reconfirm the buy signal.  I am not the avid platinum trader but this market is in a serious long liquidation and I am not sure if anyone is even noticing.  Take a good look at shorting platinum and spreading it against a long silver or gold play if silver closes back above $12.

Softs
What a week in sugar!  One of the biggest one day rallies and one of the biggest selloffs back to back and now the market is stuck in the middle.  The light volume gave us the buy signal but the gap retracement and selloff on Wednesday was no light volume day and this market doesnââ,¬â"¢t know what to do with itself.  Amazingly a long strangle play is still a relatively good deal, especially with nearly 10% moves twice in a week.  I know the coffee chart looks ugly, but look at a weekly chart ââ,¬â€œ the daily chart is for suckers and this market is heading higher long term.  In fact, a rounding bottom on a weekly and strong support on a monthly suggests this is an ideal entry point.  Cocoa is still a buy, especially after a BBC report suggesting that Ghana and Ivory Coast (representing, depending upon who you ask, anywhere from Ã,½ to Ã,¾ of the worldââ,¬â"¢s supply of cocoa) are being overrun with swollen shoot virus.  This destructive virus is forcing cocoa farmers to abandon their crops and may ultimately lead to a more significant reason to see cocoa rally than the failing election efforts in the Ivory Coast.  Cotton prices are still bearish, with a decent technical formation that showed the marketââ,¬â"¢s inability to break the 50.50 stop recommended in last weekââ,¬â"¢s report but also showed the triple bottom is holding as well ââ,¬â€œ wait and see here.  OJââ,¬â"¢s gap higher has been followed by low volume and lackluster volatility, suggesting congestion before another big move.  Look at Jan. 220 calls, but also add some 170 puts for a strangle given the low cost of the protection.  Lumber is worth looking at some OTM calls.

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.