Energy Complex (NYMEX)
Crude Oil

Crude oil briefly dipped below 70.00 but then staged a fast and furious rally back above 71.00 to end the week. We continue to expect to see 75 before 65. This week we could consolidate in the low 70's before pushing back up above 75.

Equities
SP500, DJIA, NASDAQ

The stock market continues to be a volatile place. We expect this to be the new norm for some time. This week we see the current bounce stalling and turning back down. We have a large amount of data coming out this week and it will cause both relief and renewed panic at almost the same time. Bernanke continues to hold the lynch pin though most analysts now agree that he is unlikely to use it. Barring terrorism or another devastating hurricane we agree that he is unlikely to do anything to interest rates anytime soon.

Financials
U.S Bonds

We see bonds moving lower in response to the idea that the Fed is unlikely to act. We do not see a huge sell off but rather a Fibonacci retracement of the recent gains.

Metals
Gold, Silver, Copper

Gold did hold the line at 646 and since has staged a solid bounce back above 670. However at this time we do not see a push above 700. Rather we see a market that drifts between 646- 680 in the week ahead. With little directional movement in the Dollar Gold will struggle to find a reason to move in either direction with much conviction. Silver should bounce and move back up to at least 13.00 in the near term as it is very oversold at this point. Copper is also a buy and should rally all the way back up to 375 before too long. The rebound in Asia has been greater than it has been here so far and that will support Copper. Palladium is a metal that I rarely mention but it is very oversold and well capitalized traders should go long with stops below last weeks lows.

Grain Complex
Corn, Soybeans, Wheat

Wheat did break through 7.00 with a vengeance and remains the darling of the grain complex. Nothing seems to be able to stop this runaway train but do not get complacent. Trail your stops and or buy protective puts to hedge long trades. This week we should see a test of the 7.50 level, but at the same time get ready for a break as this market has yet to correct this season. We feel that some speculative put trades are warranted at this time. Look to buy the 7.00 or 6.50 puts for a short term break down within the next couple of weeks. Corn had a pullback late last week and we would advise readers to buy calls on this pullback as our model shows higher prices to come as we get into harvest. Soybeans should push through 8.50 this week and could test the 9.00 level again in early September.

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

OJ continues to drift, without any hurricane news this market is likely to continue to drift sideways to slightly higher in the near term. Cocoa is confirming the turn back up we were looking for last week and we are advising clients to purchase call spreads this week. Coffee too remains a strong buy for the short term. Sugar is also expected to start moving up this week. Cotton continues to try and recover but needs to close above 60 on the Dec. contract to convince the bulls to jump back in.

Meats
Lean Hogs, Live/Feeder Cattle, Bellies

Live cattle moved higher last week erasing the bear flag pattern we thought we saw last week. Look for Oct. to test the 100 level again this week. Feeder cattle is trying to push through the 118 level we mentioned last week, if it can do that then we could see an explosive rally. Lean hogs also staged a large rally late last week that effectively erased the bear flag we were watching. We are now on the sidelines in both hogs and bellies and will wait there patiently for a clearer picture to develop.

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.