Energies
Energies were choppy and volatile this week as Wednesday's inventory report was unexpectedly bearish, but was countered by the announcement of the revaluation of the Chinese Yuan.  The announcement is expected to increase oil demand from the world's second largest user, and there was some pre-weekend short covering over worries of the next potential hurricane threat.  I remain bearish and selling calls on days like today.  The heating oil/unleaded spread corrected itself, but it has more to go.  Natural gas is a sell on a move to around 760.

Financials
A 4 year high in stocks leaves a bad taste in my mouth, but overall the market is offering a seasonally terrific entry to a short play.  Since no major or minor breakout has followed through in years I cannot imagine this to be the exception.  I recommend selling into the rally expecting a very bearish month of August ahead.  Bonds broke the critical 115-26 mark and is bearish with a capital B.  Sell calls on bounces and buy puts all the way.  The dollar is choppy and, while I remain a long term dollar bull, I believe 92 will the rough high for the year and the market will be in a range of approximately 87-92 over that time frame.  With that said, I recommend selling option premium using short strangles in all the major currencies (except the yen which has expanding volatility) over the next several months.

Grains
The overbought and ahead of itself grain market offered yet another chop back to reality this past week.  I remain a bull and feel this is an ideal price area to get closer to 90-100% in the market, especially on bean support and corn's sharp decline.  Buy on dips and don't panic on a break below trend line support. Rice is still a strong buy.

Meats
Cattle on feed and a semi-annual inventory report came in line with rough analyst estimates that showed increased inventory of 2% year over year and a slight expansion of the nation's cattle population.  The take on this should push prices lower on Monday.  The cold storage numbers might give the bulls a shot on Monday in bellies and hogs and I would watch the whole meat complex carefully next week as the should set a strong trend for the coming months across the board.

Metals
Strength in gold came amid terrorism in London and the Chinese Yuan announcement.  The general consensus is the Yuan's break from the US peg is bearish US dollar but I think the mild reaction from the foreign exchange market shows that this is phase one of a long term plan and that the US dollar is self-sustaining.  With that said, I take the near term strength in the gold market as yet another opportunity to scale into bear plays.  Silver remains very consolidated and while I have a similar bearish view the best play here is probably a long strangle to play the potential volatility ahead.  Copper is still a short.  I continue to recommend selling platinum and buying palladium with an inter-market spread ratio of 1 to 3 (perhaps 2 to 5 is better if you can play with those quantities). 

Softs
Coffee fell apart on us bulls, but it was not entirely unexpected.  Look for another leg down to clear out the suckers and then jump long.  I see a 92 target give or take as a bottom.  Speaking of suckers, the quiet cocoa market is begging for bulls to get dragged in, but my gut says we are in for a decent leg down as the Ivory Coast has about a month or so before the pre-election violence escalates.  I would target 1300-1320 for a good long entry.  Cotton is still a sell with a sub-40 target - Emily was just a short term distraction.  Sugar is breaking out and I may have gotten out a bit too early here, but I remain a buyer of puts looking for a correction.  OJ is ugly and I am avoiding.  Lumber remains a short. 

James Mound, owner of JMTG Brokerage LLC, MoundReport.com and author of the book 7 Secrets, writes the Weekend Commodities Review Newsletter. Receive your free weekly subscription to the Weekend Review by e-mail. Click here.