Financials
Stocks: The stock market continues to rally and make new highs and grab headlines as we mentioned it would in past issues. This week the only thing holding this market back it the FOMC meeting. After that is digested look for the overall up trend to continue. We see Dow 14,000 and S&P 1600 as good upside targets for the year. The trend is your friend, and until we see something that tells us the trend is changing, roll with it.

Bonds: Bonds really seem like a dog who has lost its master. With the Fed. continuing to do nothing, bonds are left to drift with little to no overall trend. We see Bonds beginning to drift back down towards the 110 handle after this weeks FOMC meeting. This is in part due to our expectation of Mr. Bernanke "jawboning" the Dollar higher. Buy 112 puts and hold.

Energy
Our expectation of a continuation of the uptrend in energy could not have been more wrong. This market has really pulled back and is now testing some significant support levels in both Crude oil and Gasoline. We feel these support levels will not hold and we see crude dipping below $60 later this week after we get the weekly API report. Gasoline could see a fall below $2.00 which would be great for consumers and continue to fuel the stock market rally (no pun intended!). Natural gas seems to be fighting with resistance at the 8.00 level and for now we see that resistance level holding.

Metals
Gold continues to be unable to punch through resistance at $700. With the prospect of a bounce in the Dollar, Gold is likely to continue to drift sideways to lower over the coming week. Silver to should languish and as I mentioned last week, trade back and forth between 13.25 and 13.75. Copper seems overbought in the near term and the dollar could stall that rally as well.

Grains
Grains continue to look negative with corn leading the pack lower. Corn plantings are way up this year and that could and should push the price back below 3.25 in the near term. Wheat on the other hand should hold support near 460 and then begin a new rally. Soybeans are the most likely candidate to continue to move higher as much of the extra corn acreage has come at the expense of soybeans. Soybeans need to hold support above 7.25 on the July contract to maintain this bullish picture.

Softs
OJ continues to bounce but we have now formed a solid bear flag and should see this market turn lower again very soon. Look for resistance at 170 that I mentioned last week to continue to hold and once we turn lower again, this market should fall back below 150. Cocoa could be setting up for another run towards 2000, but a break out above the level is still questionable. Strong support at 1750 should hold in the near term. Coffee did find support just above the 100 level as we expected but so far the market seems unwilling to begin a new rally. Look for a close above 107.50 on the July contract before trying to buy long. Sugar, much like coffee, is trying to turn back up but until we close above 9.50 the market is vulnerable to more downside. Cotton is trying to support out at the 48 level but here too a close above 50 is need to confirm the turn higher.

Meats
Live cattle is now on a solid down trend and we see the June contract trading below 90 this week. Feeder cattle is also trending lower and could see a move below 105 later this week. Hogs drifted lower last week and we see that continuing this week as well with a test of support at 72 not out of the question. Pork bellies are also in a downtrend and should fall back below 100 and this time stay there.

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.