This week we see many of the markets "digesting the moves and data that we got last week. We should see many new trends take shape this week. Again volatility will be the name of the game this summer, so do not expect the "sell in May and go away" idea doing anyone much good. Frankly just turning away from the screen is hard in volatile times like these, let alone walking away for a prolonged period of time. Again I must stress risk management as the key to profiting or even just surviving volatility like this.

Energy Complex (NYMEX)
Crude Oil

Crude is pushing towards $70 and we continue to say that it is just the beginning. This market could push towards all time new highs if the hurricanes season is even a fraction of what it is expected to be. Gasoline should push over 2.35 later this month, and heating oil should push above 2.10 in the same period of time. Overall look for volatility in energies to be a big as they have ever been this summer.

Equities
SP500, DJIA, NASDAQ

Stocks did rally back as we expected last week. This week we see the market pushing through to new highs. Stocks are in one of the final phases of this up cycle and should see some big and fast upside spurts in the coming days and weeks. This week we are targeting a move to and possibly through 1560 on the Sep. S&P contracts.

Financials
U.S Bonds

Bonds have begun to bounce and we continue to target a move back up to 107 in the near term. We are not long term bond bulls in any way, just looking for a glorified dead cat bounce out of this one this week.

Metals
Gold, Silver, Copper

Gold bounced but seems to be stuck on the descending trend line. This market needs to push above 665 this week to be able to continue to turn this market back up. Stops should be placed below 655 as that support level also needs to hold to keep the near term uptrend intact. Silver is also turning back up and needs to trade back above 13.50 to confirm the bull case. Copper did take off and our stop was not hit so we are still long. We are moving the stop up to 334.00 and intend to trail this stop by about two trading days behind the current market.

Grain Complex
Corn, Soybeans, Wheat

Grains took off like a rocket last week lead by wheat due to harvest concerns for the current crop. Wheat should see continued upside carrying this market up to about 7.00 this summer. Near term we need to see it stay above 5.75 to maintain the bullish trend. Soybeans also took off and have now hit our target of 8.50. We have exited 50% of our position on this target being hit but believe 9.00 could come by the 4th of July. Corn moved in sympathy with the other grains but frankly we do not see this market able to follow wheat and beans in lock step. Spread long wheat or beans against short corn if you haven't already. This type of sharp rally in grains is fairly rare and should send a shock through the overall economy which could lead to the FOMC raising rates sooner rather than later.

Softs (NYBOT)
O.J, Cocoa, Coffee, Sugar, & Cotton

OJ continues to push lower but we feel that further downside is limited. Strong support lies near the 1.25 level and we do see that support holding up if the market can make it that low at all. Again with the hurricane forecast being what it is, owning calls in OJ this summer seems only prudent. Cocoa did take off last week as we mentioned it would and could now push its way above resistance at 2000. Looking at a Monthly chart, one can see that cocoa has enormous potential to rally this summer. If this market can close above 2000 then we open the door to a sustained rally all the way up to 2500. Coffee is still drifting but at the same time maintaining the bull flag pattern mentioned last week. This should still point to a rally towards 125 later this month. Sugar is again looking to push through 9.00 but be patient as this market has head faked us many times this year. We need to see a sustained close over 9.50 to be convinced that the bottom is in. Cotton did for once follow through to the upside but needs to trade above 56.00 on the front month to convince most of us that this time is for real.

Meats
Lean Hogs, Live/Feeder Cattle, Bellies

Live cattle actually turned back up this past week but we feel that with the huge run up in grain prices, meat prices have only one way to go; down. We are still targeting 88 in live cattle by the 4th of July. Feeder cattle did fall through our initial target of 107.50 last week and almost made our second objective at 105. We feel that here too the market is under pressure from grains and could fall all the way to 102.50 by the 4th of July. Hogs have continued higher and we are now long with stops below 75 on the July contract, targeting a move to 78. Pork bellies bounced last week as expected but frankly the bounce looks like a dead cat bounce so this week we see a retest of support just below 95 on the July contract.

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.