Energies
Hurricane premium built into the market going into the weekend is probably get sucked out this Monday as hurricane Dean is currently forecasted to take a more southern route than anticipated. This is the beginning of real hurricane season in the Gulf as warmer waters are setting the stage for potentially frequent and furious activity. Jump on call plays to benefit from premium spikes. Natural gas remains a strong buy on dips.

Financials
Extreme volatility this week occurred in the financial sector as Thursday's meltdown was brought about by a mass exodus of US stocks and commodities from foreign investors. This was furthered by an historic yen spike that was caused by a panic exit of the carry trade. As Asian investors in US treasuries, stocks and futures all walk out on US markets the average Asian investor will convert their dollars back into yen to pay off their loans. If the US market stabilizes then investor fear will subside and the markets will not necessarily see another Thunderous Thursday (not sure why no one named it yet so I figured that was as good as any). The Fed's surprise move to cut the discount rate on Friday is a bail out move for commercial banks, but is also an indication of the Fed's willingness to cut the Fed funds rate at the next FOMC meeting. While this could help stabilize the market volatility I am not sure it will matter in the short term. Nevertheless I would seek out volatile days to sell premium in currencies and in stock indices.

Bonds continue to appear range bound in the intermediate term, and also a good source for premium collection. The yen has set a reasonable potential top at 8995 but expect choppy and volatile trade with intraday reversals common - especially after overnight gap moves. The Canadian dollar surged on Friday but remains in a short term bear trend. Continue to short European currencies on bounces.

Grains
Wet weather is likely to set a bear tone on Monday but the lows set in corn on Thursday's mass commodity sell off is a strong indication of a true bottom being set in the market and throughout the grain sector. Continue to buy grains on dips with a harvest rally in mind. Look at some call options in rough rice as well.

Meats
Weakness throughout the meat sector was seen throughout the week and should continue. Hogs remain a market to avoid, however, as any reasonable beginning to a trend is likely to be misleading.

Metals
Premium in metals options skyrocketed on Thursday in what appeared to be a channel breakdown. While this should prove to be the ultimate result, the market has not broken the weekly channel just yet and traders should take profits on puts and wait for confirmation. Copper and platinum remain strong sells.



Softs
OJ took a strong hit as hurricane Dean did not materialize into a Florida storm, but traders should see this as a value call option buying opportunity ahead of more storm activity. Coffee collapsed on Thursday's long spec walkout, but recovered a decent percentage of the move on Friday which indicates strong value buying in this market. Expect fresh near term highs shortly. Cocoa did not recover from Thursday's liquidation but remains a good buy with call options as we head into a critical month in this market. Look at Dec. 20 calls to play a nice premium pop on a market rally. Cotton remains bearish despite the potential for damaging rain from Dean. The crop dried out enough to sustain some rain but it will be mainly a weather market this week. Sugar shook a lot of long specs out with Thursday's plunge but is a market worthy of buying some long term calls.

James Mound is the head analyst for www.MoundReport.com, and author of the commodity book 7 Secrets. For a free email subscription to James Mound's Weekend Commodities Review and Trade of the Month, click here.