General Comments Market congestion is building for a volatile breakout - or breakdown depending on the market. 'Hurry up and go nowhere' trading is about to end, I suspect, with a strong stock market decline bringing commodities along for the ride starting Monday. Energies Critical technical resistance on crude oil within $2 of Friday's closing price should be sold into with stops above. Put buying is the preferred defined risk approach. Natural gas is a strong buy with straight calls for July or beyond. The heating oil versus rbob spread is actually just about right so no play there for now. Financials The S&P has shown significant strength bolstered by strong retail sales and economic rebound-like numbers coming out of several key reports. Sell this rally with stops above 1164 or with bear put spreads. I expect 25 points down by Wednesday if not sooner. Bonds remain a strong buy. The dollar is stuck in choppy land with no clear directions on how to get back on the road to the bull trend highway, but this week is setup to be a difference maker. Expect the dollar to run to 81.50 quickly on this bear move forecast in the S&P being the catalyst. I continue to standby my prediction that: The dollar will hit 86 before it breaks below 70 or I will stop writing the Weekend Commodities Review... forever. The yen remains a strong buy, especially on this recent dip. That reverse Mound LadleTM in the Canadian worked like a charm and the market has some bullish momentum - possibly to 99.20 give or take a few points - but at that point a strong downtrend lasting the rest of the first half of the year is anticipated. The euro, pound and Australian dollar remain strong shorts. Grains The short play is on in the grain sector with a focus on beans and corn as 20% price corrections are anticipated over the next 3-4 months. The bottom line is strong supply, relatively benign global demand and a strong dollar all spell disaster for grains this season. Wheat remains a value buy between 4.80 and 4.40 and a good spread against short corn (short 2 corn to long 1 wheat). Rice has essentially fallen to my near term target area but overall remains a bear play for another 20-30% drop over the next several months. ---------------------------------------------------------- Sign Up To Receive This Report Every Weekend for FREE - Click Here! --------------------------------------------------------- Meats Obviously grains are not the only inputs for determining cattle prices as live cattle continues to breakout. Overall the market is reaching a price exhaustion point but there is technically another 2-4 cents higher to possibly run, so dollar averaging into put plays here is highly recommended. Hogs remain a short. Metals Gold is developing a screaming short chart pattern on a daily chart and I have been illustrating the downtrend setup on the long term technicals for months now. This market sector is very exposed to this long term top and could see sub-1000 prices as early as the end of the month! Silver should follow suit with significant potential volatility. Copper remains a short with a target of 2.90 or lower in coming months. Softs Coffee remains a strong buy and I suspect lowered estimates out of Brazil is just the beginning of a 2010 supply squeeze. The dollar remains inversely correlated to coffee but is limited in its ability to control price when fundamentals in this market get out of whack. Look at long term bull call spreads. Cotton is a buy on the dips. Cocoa looks to be congesting between 2800-3000 but that will not likely last long as another leg down is expected. OJ is choppy but remains a short below 160. Sugar is a buy here but I am not one to suggest standing in the way of a freefall so utilize call options only and buyer beware. | 
