Financials
Stocks: Stocks continue to push higher and we are now closing in on 13,000 on the Dow. There seems to be nothing that can hold this market back so look for the Dow to reach that objective before the end of the quarter. Sooner or later this market needs to and will correct but for now the path of least resistance remains up.

Bonds: Bonds have been able to break through resistance and continue to rally back toward 112. We expect bonds to meet the 112 objective this week and begin to test 113 shortly thereafter. We continue to expect the FOMC to do nothing with rates for at least the first half of 2007 if not all of it.

Energy
Crude oil continues to consolidate between 57.11 and 61.37 on the April contract and is likely to continue to do so for the coming week. We will need some new “event” to drive us out of this range. We continue to be biased to the upside and see a move back towards $65 in the not too distant future.

Metals
Metals have been on a strong run lately but should find resistance in the near term. Until we get a clearer sense of direction from the Dollar metals should drift lower. We need to see decisive weakness in the Dollar to be able to push Gold above $700. Silver could correct back to 13.25 near term and still be bullish over the longer term. Copper remains stuck in a range between 270 and 240 and is unlikely to break out of that range any time soon. Near term look to retest support around the 240 level.

Grains
Grains continue to be mixed. Soybeans remain strong but corn drifts sideways while wheat struggles to find and hold a bottom. The trend in soybeans remains strong and should not be fought. Keep trailing stops below trend line support and be ready for a hard and fast break sometime soon. Wheat is still a buy with stops below 447. Corn seems to only drift with little to no commitment. The yet unfilled gap on the daily charts continues to leave me feeling uneasy.

Softs
OJ is so far unable to follow through to the downside and for now remains range bound. Near term we see more sideways action in OJ. Cocoa remains strong, near term look for 1800 to be tested this week. Coffee is also just drifting lately. Support at 112.50 should hold but we need a catalyst to turn this market higher and what that is and when it might come is yet unknown. Sugar is trying to turn the corner back up but for now I remain cautious. We remain long from 10.50 with stops below 10.00. Cotton has fooled me so many times in the past year that at this point I refuse to play. I want to believe in a coming bull market like my charts tell me to but you know the old saying “once bitten twice shy” well I have been bit by copper more than once in the past year and am therefore even more than twice shy.

Meats
Both live and feeder cattle look weak in the coming days. We have seen both of these markets trend higher for sometime and is now time to consolidate some of those gains. Near term look for a pullback that forms a bull flag, particularly in Feeder cattle. If grain prices remain stable or pull back then it is off to the races for the meats. Lean hogs are leaning on trend line support and if it holds we are seeing some strong buying points near 67.00. Longer term I remain very bullish Lean hogs and see a retest of the 70 level before the April contract goes off the board.

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.