___ James Mound Trading Group ___ Toll Free: 1-888-744-8866 http://www.moundreport.com/ info@moundreport.com The Weekend Commodities Review By Head Analyst James Mound For the Week Ending November 23rd, 2008 Friday's treasury secretary announcement may give the markets exactly what they need to make a bull run. Throw in a good base support in the euro and this is what the bulls have been waiting for so get ready for a volatile holiday shortened week. ***In observance of the Thanksgiving Holiday weekend there will be no Weekend Commodities Review next week. Have a Happy and Safe Holiday.*** Energies Oil below $50 on a single down leg from $147 seemed impossible to even the most extreme bears, but here we are. The dollar turn this week to bearish should push oil prices higher as distillate supplies go into a period of draw. Expect a boost in natural gas as we get a cold few weeks in the U.S., but the surprise supply increase last week cannot be entirely ignored. Financials The big news came late Friday with the announcement of Tim Geithner as the new treasury secretary, spiking stocks into a weekend rally. After the close CNBC was pushing a news story about Summers being the next Fed Chairman but there are three things to note here - 1) Where the news came from is a bit of an unknown 2) It can't happen until 2010 3) The Fed Board needs to approve the election. So whether it was a 'test the waters' move or a bunch of BS remains to be seen, but the real focus now is on Citi and the government's bailout that needs to happen. Then it will be on to the automobile industry with a revised bailout proposal due out by the second week of December. I suppose the underlying point of all this is two fold. First, whether it is an ideal response or not, the coming weeks will provide solutions for several panic button topics for investors. Second, somewhere along the line we stopped caring less about economic data and more about government intervention, which means the net outcome of these moves will likely push a bullish psychology into the stock market and then ultimately a refocus on economic data. Buy the stock market on dips. Bonds made an epic rally in what could only be described as a capitulation event. This should set a spike high in the market (let's be very, very worried if that high gets broken) and offer an impressive short from here. The dollar is finished to the upside for this year, in my humble opinion, and the euro, pound, Canadian and Aussie dollar are all buys. The yen should fall along with bonds and the puts in this market are so cheap it will feel like they are paying you to buy them. Grains Are grains destined for an epic market collapse? Prices continue to tumble on strong supplies and weak demand, however there is a lag in foreign demand as this credit crunch freezes assets that would buy grains on value during a period of cheaper transportation costs. This lagging demand is soon to be realized and a grain rally is likely to ensue in coming weeks as the dollar takes a bit of a beating. Get long near term calls because it is now or never (well never is more like a few months in a trader's mindset). Rice continues to be a sell with some price support around 12, but overall this market is exposed to further downside. ---------------------------------------------------------- Mound Trade Signals subscription price - Currently $494.99 - Effective Midnight 11/24/08 the price goes to - $949 - Act now and lock in the current rate! http://www.moundtradesignals.com/ --------------------------------------------------------- Meats Cattle took a hit this week as declining feed prices and strong dollar means good supply and weak demand. Expect a strong turn to the upside in coming weeks as demand spikes and grains rally. Friday's cattle on feed was bullish as a nearly 7% drop was far below expectations. Hogs remain a buy through year end. 
** Chart courtesy of Gecko Software's TracknTrade Metals Gold is getting a little tricky lately. The flight to quality from the stock market plunge didn't kick in and the market is lagging the dollar moves because the trend in currencies is not as clear as it was when the dollar was surging to fresh highs every other day. Physical gold is nowhere to be found and winter Asian demand was very strong this year by some perspectives. The market could be setting up a major spike rally as the dollar turns south, so be on the lookout for opportunities to get long straight near term call plays and possibly futures. Silver remains a volatility play to the upside with under priced calls - a steal relative to what could be a $3 plus move in a very short time frame. Softs Cocoa is catching a bid as concerns over diseased crops from the Ivory Coast continue and the market ponders how to deal with the possibility that a cut in export tariffs could spike demand. This market is due to correct to the 1400-1500 area and this bounce was needed to setup more downside momentum. Do not get caught in the bull trap here. Buy puts on the rally. Coffee is getting beat up a bit as Brazilian flowering conditions have been solid, but keep in mind this is a small crop year and that means that 2009 will offer some serious supply shortfalls. This is a terrific market for a long term buy at value levels. Cotton is in rough shape but I am contrarian buyer here, aggressively with calls. Sugar is turning bullish despite a short term bearish chart pattern. Play calls with low volatility premium for a strong rally - if the market breaks 1086 forget I mentioned it. OJ may get a spike on some cold weather fears in Florida in coming weeks, but more important is just playing value in a market that has plunged from 210 without much of a dead cat bounce along the way. Lumber remains a cyclical value buy. | 
