Lumber can be a very volatile market. Last hurricane season we saw lumber prices all over the map. So far this hurricane season has been quite quiet, but it is still early in the season and I have an eerie feeling that we may be seeing the calm before the storm. With the prospect of the summer continuing to be being abnormally hot the probability of some devastating hurricanes remains high. This trade is a great way to position yourself long the lumber market for the month of August which is traditionally one of the worst months for hurricanes.

Like it or not, we, you and I, all of us are living in an era of social and societal meddling.

If it were but good, rather than just well intended, we might find it in our hearts to forgive the muddling of their meddling. But to confuse good intentions with dilatory results is to fall into the camps of these meddlers. This is not what America was designed to encourage and its proliferate use, whether by Government or by political ideology, especially when reviewing the history of motivated, albeit incompetent good intentions leads to inescapable questioning.

Investing abroad has been a fundamental part of institutional investor’s strategy for quite some time now, but now globalization of financial markets has given the traditional investor a chance to take advantage of the opportunities abroad. Over the last few years, especially since the U.S. recession in 2001-2002 when U.S. equities struggled, investors have looked for opportunities elsewhere.

September coffee futures at the New York Board of Trade remain stuck in a six-month-old downtrend on the daily bar chart, drawn off the late-January high of $1.3175. Prices just this week hit a fresh 19-month low of 93.95 cents. As the potential frost-freeze season in coffee-growing regions in Brazil is winding down, with no apparent threats this year, speculative traders have gradually been taking a weather premium out of the futures market the past several weeks.

Bonds have been in rally mode since the last FOMC meeting in June. We have recently seen a very large number of indicators issue sell signals on this market, Stochastics, and CCI to name just a few. The consensus is that the Fed. will move rates to 5.50% at the August 8th meeting. After that it is about a 50-50 guess as to if the Fed. will pause or continue raising. The yield curve remains inverted and T-Bonds struggled with the 108 handle and with Oil maintaining itself above $74 a barrel plus other key commodities like copper at or near all time highs, the signs of continued inflation are clearly written on the wall.

When speculative excess grips a market, as I believe we have witnessed within global copper prices, they tend to gravitate back to the point where that excess buildup began. No matter how large or small it may be.

Enclosed are a few examples where you can easily see this in action. One thing to keep in mind, which is more really a matter of common market sense, the less liquid a market is the faster the move back down the mountainside.

It may be that the time is now ripe for us to reflect on why high oil prices have not had the negative effect on the economy that it was expected would follow this and associated escalations, now attributable to concurrent, though unrelated, military activities. Well, with interest rates at current levels, and they were lower, with the oil price push and other raw commodities also reflecting, it seems that the price push has not curbed the spending spree which, to now, the consumer has enjoyed.

Of all the materials currently utilized by humans, zinc is the one with the most versatility. It is an essential material in the production of skyscrapers, a vital nutriet to agricultural crops, and an increasingly important additive in medicines. While its use are diverse, the price of zinc is still highly coordinated to the construction industry, as its predominate application is for the galvanization of steel.

The Japanese Yen has always been a tough market to trade. The Bank of Japan(BOJ) is infamous for the manipulation of its currency. That being said, we have just recently seen a dramatic change in the BOJ policy. Last Friday (07-14-06), the BOJ raised its key overnight call rate to 0.25 percent from near zero, ditching a policy of keeping interest rates at zero that it had followed since early 2001. This should open the door to continued rate hikes in the future and shows an overall improvement in the Japanese economy.

October live cattle futures at the Chicago Mercantile Exchange on Wednesday poked to a fresh four-week low of $86.15. Price action this week, including Monday's gap-lower trade on the daily bar chart, could have been the early stages of a bearish downside "breakout" from a bearish pennant pattern that had formed the past couple weeks. However, the strong rebound in prices Wednesday, on fresh speculative fund buying and short covering, negated that potentially bullish chart pattern and did revive the bulls.

Fundamentally weak, technically broken….So what happens to a market that faces record high oil prices, a slowing economy, a slowing housing market, global monetary tightening policies and geopolitical tensions. If you knew about all of these factors, you would assume the market was weak, which in fact it is.

Contrary to the price action seen in other commodities today, NY cotton staged a conspicuous rally by moving all the way back up to 5320 in early dealings. This move may serve to confirm suspicions that cotton prices are situated in a sideways trading range between 5188 and 5426 over the near term. Only a break outside of those numbers will provide a change in that appearance. It wouldn’t be a shock to see sizable stops placed in abundance near those numbers. So, treat those levels accordingly.

Oj looks as if it has now stabilized and I will be cautiously entering the long side this week with stops just below 155. Cocoa has found short term resistance and for now I am not going to buy this pullback. In fact puts could be the way to go in the near term.

Crude oil futures futures at the New York Mercantile Exchange on Thursday set an all-time record high, basis nearby futures. And in after hours trading Thursday afternoon prices pushed above $77.00 a barrel. Bulls are very strong--both technically and fundamentally--in the crude oil market. The next major upside price objective for the bulls is major psychological resistance at $80.00 a barrel.

JOHANNESBURG (Business Day) -- Uranium has definitely been in the spotlight this week.

The U.K. government released its Energy Review, which, as expected, gave the go-ahead to building new nuclear power stations. JSE- and Toronto-listed uranium company sxr Uranium One [TSX:SXR] announced it was negotiating two separate acquisitions of uranium mills and properties in the U.S. Reuters reported that a new investment fund, Geiger Counter, was launched in the U.K. this week to invest specifically in uranium companies.

Gold has been on a wild ride ever since breaking out above $500. We saw a brief but fast rally that carried us to about $740 earlier in the year. Since that rally we have seen quite a dramatic sell off followed recently by the current bounce. I believe the current bounce will carry us back towards $700 and ultimately test the highs made earlier this spring.

After centuries of lagging behind, Mexico seems to be headed on the right track, especially with the recent election of Felipe Calderon. Has Mexico set the foundation for its return to greatness?

We just exited our July Euro put spread for a little more than a 100% return in 30 days. As I mentioned in the July spread I remain a longer term bull of this market. The Euro continues to gains strength and I see an upside break out coming later this month and this trade is positioning us for exactly that.This has been our single best trade so far this year and as usual I recommend banking the profits from the July trade we exited today and reinvesting the original capital from it back into this August spread.

The question has been posed by the media, market analysts and every individual who has an interest in the financial markets direction. The greatest thing about it is that NOBODY KNOWS where the market is headed next. Yes, there are theories, hypotheses and guesses, but only the market knows where it will be headed next. And the market reacts to traders’ emotions, opinions and strategies as well as speculators’ biases.

Q. I've read that a mutual fund containing commodities will help give my portfolio some diversification and help me make money when the stock market is down. I have heard of Pimco Commodity Real Return. Are there other commodity funds? My financial consultant was having difficulty identifying them.

--D.B., Baltimore

August gold futures are presently in a fledgling uptrend from the mid-June spike low of $546.40 an ounce. Prices this week have worked to a fresh two-week high of $599.00, scored Tuesday. That price level is now some solid overhead technical resistance. A push and close above $599.00 and then above major psychological resistance at $600.00 would provide the bulls with some fresh upside near-term technical strength to suggest that prices can continue to trend higher in the coming days and weeks.

Russell Indices are rebalanced only once per year. You might say "So what", but here is what it looked like after that rebalancing, after the close of the session for the Russell futures on Friday June 30, 2006: Russell 1000, prior to the rebalancing, down 2.25; after the rebalancing, down 1.60; Russell 2000, prior to the rebalancing, up 6.40; after the rebalancing, up 10.10, gaining 3.70 on the fair-value close, and the Russell 3000, prior to the rebalancing, down .24; after the rebalancing, up .45. What does this say?

Corn has been selling off for most of the spring and early summer. We are beginning to see signs of a bounce. That bounce is based on deteriorating crop conditions due to all the crazy weather we have seen this year as well as all the talk about ethanol. With a number of new ethanol companies going public we should see more and more demand for corn which is what we here in the US primarily use to produce ethanol.