Financials
Stocks: The market bounced a bit further than we expected but is still very bearish. Friday’s high is just below the high on Feb. 28th and we continue to build a bear flag. This week I expect to retest the lows at about 12,000 and there is a chance that we could fall below that. We continue to advocate the buying of puts and or selling of calls on any rally.

Bonds: Bonds had a shake out on Friday. This should allow the market to now turn back up and continue its run toward 114. Look for a slower move up this week than in weeks past. The only thing that could push this market fast would be a free falling stock market. While we do expect the market to trend lower, an all out free fall is less likely.

Energy
Crude oil did pull bask below $60.00 as we warned last week. This is a dip that should be bought. We continue to target a move back into the mid 60’s range before the end of the month. Natural gas cannot seem to stage any substantial rally. Aggressive traders can buy this dip, but run stops below 6.90 if you do go long.

Metals
Metals have stabilized as we mentioned last week. Both gold and silver are now solid buys. Buy long calls and hold on. This market is about to stage a strong recovery rally. Gold should find its way back above $700 by month end. Silver should bounce back to at least 13.50 in the near term. The bull flag in copper we mentioned last week did prove to be correct and we continue to target a move back above 300.

Grains
Corn is drifting and a sell off seems likely this week. We still see a move below 4.00 in the near term. Wheat looks stronger than corn and at this point is a buy. Soybeans are trying to find support near the 50 day moving average and could bounce off of that level early this week. If it holds, go long and hold on for a move back above 8.00.

Softs
OJ did start to correct lower last week as we had hoped. We remain short with our stops now at our entry points. We are expecting a move back to 190 or lower this week. Cocoa is going through a range expansion while at the same time forming a bull flag. We continue to see this market pushing through 1800 on its way to 2000. Coffee remains weak until we test support at 108. Sugar did pull back and is for mow is somewhat neutral. Cotton has reached trend line resistance and really need to push through 55 this week if this rally has any chance of continuing. We are neutral cotton at this time and frankly feel that a sell off is more likely than a rally this week.

Meats
Both feeder and live cattle remain strong but we favor Feed cattle in the near term over live cattle. Keep trailing stops with the market as a fast correction is right around the corner. Lean hogs did follow through, but remains bullish this week. Target a move back above 70.00. Bellies also took off as we expected and this market too remains a buy. Target a move above 110 this week.

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.