Energies
Crude oil congests above $100 with little reason to buy today that wasn’t there a week or a month ago. This market is sitting around waiting for a reason to breakout and rally but now has a bunch of forces pushing against it. The stock market is in a slide. The dollar is choppy but should breakout and rally from here. Copper prices are declining, which reflects a bearish attitude toward China growth and demand. All of these factors scream a short in energies, but the market seems to be lagging. This week should offer selling and a break below $100. Natural gas poses an interesting bull play as it is reaching a capitulation point and should see marked upside once a bottom is set. A volatility play with long calls is recommended out in the December contract month.

Financials
The stock market is in a slide as anticipated and more downside should be expected. The stock market has trained traders to expect a bounce within days of a decline, as the stock market has repetitively reversed selloffs and set fresh highs. I do not believe this is the current scenario and a big crash should take the market by a bit of a surprise despite the overbought market condition. The dollar is in a chop but I expect a breakout rally this week. The yen needs a 200-300 point rally day to force a short covering surge but otherwise the market has gone the way of treasury bonds and should play catch-up since bonds have come back into the prior range while the yen still has a ways to go. I continue to stand by my forecast that:

The Japanese Yen futures will hit 140 before it hits 80 or I will quit writing the Weekend Commodities Review...forever.

Grains
Corn is falling as the market realizes the supply that is about to hit. Let’s face it - the bull cycle is over. Look at the history of grains: sure it is always center of your world and today is different and history won’t repeat itself – I am sure you will get rich with that attitude! The bottom line is for over 100 years grains have gone through 2-6 year planting cycles and there is little reason to think these sustained high prices will not be met with oversupply. The world hasn’t run out of places to plant corn just yet. Expect a bit of a switchover to beans after this latest report and I believe they could be hardest hit on a grain sector-wide selloff.

Meats
Cattle is in a bit of a freefall as expected and I recommend selling the bounces – double digit prices here we come! Hogs also broke support and are a sell.

Metals
Gold and silver remain choppy but overall these markets are still on course for round two of their epic selloff. Copper is in a heavy downtrend and for good reason – China sucks! Too bad copper options aren’t liquid, but if you have the risk tolerance this market is still a strong short with stops above 380.

Softs
Coffee is weak but it could continue to congest or develop another selloff. The market lacks a bullish component and therefore I still like the downside play if you take time decay out of the equation. Cocoa’s surge last week should be short-lived but overall this market is avoidable until last week’s lows are taken out. Cotton remains avoidable. OJ nose-dived and there is more downside following the cold storage numbers coming up on Friday. Sugar remains a short but a down week is crucial to sustaining long term bearish trend momentum.

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