The week ahead continues to show signs of increasing volatility. We are seeing this volatility spill over into many diverse markets. Metals, energy, stocks, bonds, even grains are all moving wildly in both directions. This trend of increased volatility is great for us traders as the word volatility is really just a fancy way of saying opportunity. But with the increased opportunity comes increased risk.

Energy Complex (NYMEX)
Crude Oil
Crude continues to consolidate within its trading range between 62.50 and 67.50. We continue to expect a push back to and through $70 later this summer. Demand for energy remains high and we are still years away from any type of real viable alternative so this market has plenty of fundamental reasons to run higher. If the hurricane season is even half as bad as predicted, we will see crude oil make new all time highs this year.

Equities
SP500, DJIA, NASDAQ
Stocks are trying to stage a pullback but we have seen this many times in the recent past and each time the market has failed to follow through to the downside. Could this time be different? For sure it could, but statistically it is not likely. We see this dip being another good buying opportunity and we should see the indices hit relative new highs again before July 4th. Later in the summer we do see a sizable correction coming but our models do not show the current pullback following through.

Financials
U.S Bonds
Bonds totally broke down last week and free fell all the way below 106. This was a huge move and has now opened the door to a new trend. Frankly we feel the market has gotten a little ahead of itself and we expect to see Bonds rally back up above 107 this week.

Metals
Gold, Silver, Copper
Gold and silver both hit our targets mentioned last week and we have covered our short positions. We should see both metals bounce this week and consolidate last weeks sell off. We feel this is a dip that should be bought with stops placed below last weeks lows. Copper traded lower last week but missed our target by just a few points. This week we like the long side of this market with stops placed below 316.50.

Grain Complex
Corn, Soybeans, Wheat
Wheat is building a classic bull flag that should point to a move up to at least 560 on the July contract. Soybeans did push higher as we expected but have not yet hit our target of 8.50. Friday's move was a classic shakeout and should propel this market to at least our 8.50 target this week. Corn remains range bound between 4.00 and 3.50 and we expect this to continue for some time.

Softs (NYBOT)
O.J, Cocoa, Coffee, Sugar, & Cotton
OJ is trying to hold support above 146 and if it can then we expect a rally back up to 170 by mid summer. Owning OJ calls through what is expected to be a very bad hurricane season is the best trade we see in OJ for the season. Cocoa continues to drift but should hold support above 1800 this week. Buy in or at the money calls this week and look for a rally back up to the upper end of the range by July 4th. Coffee spend last week consolidating the breakout but in doing so has built another bull flag. This should point to a rally towards 125 later this month. Sugar is still struggling to find a bottom but we are now ready to look at buying longer term calls in this market. Cotton is still trending up and should now be looked at for long entry opportunities.

Meats
Lean Hogs, Live/Feeder Cattle, Bellies
Live cattle did push through our 90 target last week and continues to look like it will trend lower. This week we are targeting a move down to 88. Feeder is still moving lower although slower than we expected. We continue to target 107.50. We could see this market fall all the way to 105 this week so be ready for momentum to pick up a bit. Hogs broke out to the downside rather than the upside we had been looking for. We are now testing support levels in hogs just above 72. We suggest buying this dip with stop and reverse orders below 72. Pork bellies did break down as we mentioned last week but should find and hold support near 92.50 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.