Financials 
Stocks: Stocks continue to hold onto their gains and ignore any signs of a troubled economy. I continue to be bearish but this bearishness has done me little good so far and I am beginning to question my own position. Which is most likely a sign that the market is about to turn down. For now I will stand aside and look for better opportunities in other markets.

Bonds: Bonds resisted out and formed a perfect double top on the daily charts. This market is on a one way path to 110 in the near term. Look for support at 110 to be broken by the end of the week. We could see a move to 108 in the not too distant future. Bottom line here is bond traders got it wrong in thinking that the Fed. was going to lower or raise rates any time soon. Mark my words here: the FOMC will not raise or lower rates at all until sometime in the second or third quarter of 2007. This week bonds are a sell on any strength we see.

Energy
Crude oil has seen some wild volatility but is unable to break out of its 57-62 range. This is range trading at its best. Buy as close to 57-58 as you can with stops below 57 and sell as close to 61-62 with stops above 62. There is little out there in the near term that could break us out of this range so until then trade the range. Natural gas is a sell this week with stops above last weekââ,¬â"¢s highs. This market will have one more stumble before getting some solid footing underneath it later this fall.

Metals
Gold really took off after breaking through resistance near $600 Even in the face of a strong dollar we saw gold continue to rally. This should not be ignored. Metals are on the move and 650 is the next stop for this runaway train. The bull is back and stronger than ever. There is an outside chance that gold finishes this year near the 730 highs set earlier this year. This market has emerged from a very strong coil formation that should provide enough fuel to move this market back towards 675 by Thanksgiving. This year metals traders will really be giving thanks. Copper is about to follow gold higher so for those of you who did not follow my recommendation a few weeks ago to buy gold you can buy copper now as the laggard. Copper is poised to move up through 375 this month so donââ,¬â"¢t be surprised when it does.

Grains
Grains have reached a point of exhaustion near term and are a sell going into this week. Look for a hard a fast downside correction this week as grains try and digest all the recent movement. These markets are not a one way street for very long so do not get complacent and think that this is easy money because trading futures is anything but easy money. We are at or near long term resistance points in almost all the grains which is a big part of why we are expecting a pullback. Does this mean we are bearish the grains altogether? Not at all, we are simply looking for a near term correction, then longer term we feel these markets will in fact continue to move up but for now the almost vertical movement we have seen is all but done.

Softs
Oj managed to rally to 2.00 this week but we remain very cautious as this market has a tendency to have very violent corrections within is bull phase. This week we will be looking to go short with stops just above the highs set on Thursday. Cocoa is setting itself up for a run to and possibly through 1600 this week. Look for tensions in the Ivory Coast to be the catalyst for this rally. Coffee is really taking off and we continue to believe that this is just the beginning. We are approaching some minor resistance near 113 so donââ,¬â"¢t be surprised by a stall there but longer term we are going to 125 and beyond. Sugar continues to struggle but it wonââ,¬â"¢t be long now until this market joins the rest of the party at the NYBOT. We will be going long sugar this week so look for a trade from us in that market. Cotton continues to be a sleeper but could also finally join the party and begin to rally so we are advising clients to go long cotton with stops below 48.

Meats
What a week for the meat complex. The grain complex continues to wreak havoc on these markets and I expect the volatility to continue. The resistance level I mentioned last week for dec feeder cattle held up and the sellers took advantage. Look for a possible retracement to fill the gap above 103.10, and further weakness if buyers cannot regain 105. December Live cattle also faced selling pressure after a rather large head fake last week. I am looking to sell this market above 87.25 with a stop above 88.25. Dec Lean Hogs remain quite resilient amidst the slaughter going on in the rest of the meat complex. (pun intended). From the long side 63.80 is an attractive entry point though I would use a pretty tight stop. If hogs can rally above 66 the market may really get going. Look to straddle this market with 65 calls and puts for December. Not sure about my ideas, give me a call and tell me what you think.

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.