Recently Federal Reserve Chairman Ben Bernanke showed optimism predicting the end of the recession by the end of 2009. We all from Wall Street to Main Street hope he is correct. We need to be able to generate jobs and keep people in their homes. Mr. Bernanke's statement temporarily stopped the Stock Market avalanche slide and even stalled the "Bull Run" of the Gold market.

The Gold market has held STRONG despite frantic attempts to solidify the Stock Market and that is an indication financial institution and investors World-wide are choosing Gold as they're "safe haven". We are certainly living in uncertain times with record unemployment and bail-out programs for the nation's largest corporations. The volatility in these world Markets is unprecedented and should continue through the recessionary period.

Bonds and notes spent the day paring early morning losses. The Federal Reserve issued $22 billion in 7-year notes for the first time since 1993 and found a decent amount of demand for the security. Additional price support was found as rumors that Chinese officials seemed to imply that buying fixed income assets would still be a large part of their operations despite their shrinking budget.

Perhaps now that the record $94 billion weekly supply issuance has been accounted for, Treasuries will find reason to make their way modestly higher.

Ben Bernanke seemed to have revived the financial markets, at least temporarily, for the second consecutive day. At one point the S&P was trading nearly 20 points into negative territory; however, details provided for "stress tests" and the granting of immediate access to further government support from the $700 billion bailout fund managed to turn stocks around in late session trade.

Bernanke clearly stated that there are no talks in regards to nationalizing the banks. Accordingly, the Treasury Department announced that the government is prepared to purchase preferred shares of bank stock that are convertible into common shares. They expect to do so at a discount of 10% of their price before February 9th.

May soybean futures at the Chicago Board of Trade late last week dropped to a fresh two-month low of $8.54 1/4 a bushel. Price action this week has seen some tepid short covering in a bear market, but the bears continue to hold the near-term technical advantage. May beans continue to trade below a six-week-old downtrend line drawn from the January and February highs. It would take a move in prices back above major psychological resistance at $10.00 a bushel to push above and negate the downtrend line on the daily chart. Two popular moving averages overlaid on the daily chart for May soybeans (9-day and 18-day) are also in a bearish posture at present, as the 9-day is below the 18-day moving average. Both moving average lines are also trending solidly lower, which is another bearish technical clue.

In his infinite wisdom I quote one of Rick Santelli's comments from last week, "Instead of giving away fish we must teach the public how to fish." Although I think he tweaked the original, this version is more suitable in its current context. The way I view it is that with more government involvement, their labors will not fix the ailing economy but only prolong the recovery. Whatever happened to the saying no pain no gain? Let banks fail, companies go out of business and overzealous speculators lose money. Why should everyone else who played by the rules have to sacrifice. I agree with Marc Faber, "The best policy response would be to do nothing and let the free market correct the excess brought about by unforgivable policy errors."

The Treasury market is struggling to find a reason for yields to fall. Not only is the Fed issuing massive amounts of debt but the bulk of the Treasury buying has been China and many are questioning whether this is sustainable.

As you have likely heard, the Chinese have dedicated themselves to purchasing U.S. assets as a method of keeping the value of their currency at low levels. As you can imagine, this is a challenge given the massive number of exports out of the country. However, with the global economic weakness it seems likely that a decrease in Chinese exports may detract from the need to deflate its currency and therefore buy U.S. backed fixed income products. Additionally, the G7 is pressuring China to appreciate its currency in order to alleviate trade imbalances.

April gold futures on Wednesday notched a fresh seven-month high of $988.70 an ounce, on safe-haven buying interest amid heightened worldwide economic and financial market uncertainty. Gold prices are in a four-month-old uptrend from the October low of $689.70 an ounce. The next upside technical target for the powerful gold market bulls is the major psychological resistance level of $1,000.00 an ounce. Just above that price levels resides the contract high for April gold, at $1,005.30. Multiple closes above the key $1,000.00-an-ounce level would be another very bullish technical clue to suggest still more upside price pressure in the near term.

The U.S economy is banking very heavily on President Obama's recent signing of the economic stimulus plan. The U.S. as well as world economies have certainly had plenty of poor economic numbers in the past 18 months such as record unemployment, record foreclosures, long time Financial Institutions needing bail-outs just to name a few.

I am not sure if there is a quick fix or a crystal ball solution. It has become clear our present economic condition certainly did not happen over night and it will not magically repair itself over night. Investors who once had disposable income to invest are now using those monies as priority income. This has become a sign of the times.

It was evident very little could be done at the G-7 meeting to help the global slowdown. The G-20 summit in April could be more of a pivotal event. More than comments from the G-7, we would look for the passing of Stimulus Deux, the bank rescue and moratorium on mortgages, to be the big events this week that drive trading. The markets have been searching for any bit of positive news and if these most recent maneuvers deliver any confidence, we would expect for monies on the sidelines to be committed to various asset classes. The key will be following the flow of funds and to play the longer term trends. I am currently reading a book entitled "The Professional Commodity Trader" about Stanley Kroll a commodity broker in the 60's and 70's. In the first 5 chapters the theme is to play the major trend with your positions and use the minor trends; i.e. setbacks or advances for your entry. He stresses how critical money management is to be successful and I wanted to echo that to all regardless of the asset class you trade.

Who is going to buy our debt? Why would another country buy our debt with money other than that from the trade imbalance the US has with their country? That means when we buy goods from another country, we pay for those goods and services in US Dollars. The recipient of those dollars can either spend the US dollars or sell them. When the foreign countries spend US dollars it usually is for US Treasuries or US equities/ bonds. As the economy slows down, we are importing less thus, the amount of money invested in the US Treasuries of US funds is diminishing. If we flood the market with currency, in an effort to bail the economy out of its rutt, that will bring down the buying power of the dollar when converted to a foreign currency, and thus cause the foreign governments concern. These are important thoughts that we Americans should think about. Bad enough we are hocking our children's futures but what happens if the rest of the globe decides not to fund our debt. We are aware that we can just print more money, but doesn't that have its problems as well.

Anticipation and the eventual passing of the stimulus package rekindled supply concerns in the Treasury markets. Despite a shorten pit trading session, the electronic contract eventually fell in excess of 3 handles. While these types of price moves have become commonplace, they used to be rare. Nonetheless, traders and analysts seemed to take it in stride as all are looking forward to the extended President's Day weekend.

The economic calendar was thin and so was volume. My guess is that the recent rally was largely in part of position squaring ahead of the holiday. Accordingly, with many traders on the sidelines the fresh wave of selling had an exaggerated effect.

March ICE cotton futures on Tuesday traded down the 300-point trading limit, and then on Wednesday showed solid follow-through selling pressure to produce significant near-term technical damage. The daily bar chart for March cotton futures shows that an uptrend line drawn from the November, December and January lows was penetrated on the downside and negated. Now, a fledgling three-week-old downtrend line can be drawn off the January and February highs. The next downside price objective for the reinvigorated cotton market bears is to push prices below a very strong technical support zone between 41.31 and 39.23 cents. The contract low is 39.23 cents. A drop below this support zone would produce more serious technical damage to then suggest an extended price downtrend.

The financial markets expressed their discomfort with the lack of details provided on the restructured TARP plan and the uncertainty over the economic stimulus package. Equities seemed to slide off of the cliff, while Treasuries finally experienced the short covering rally that we have been looking for.

Trade was thin, and seemed to get thinner as the afternoon hours approached. It is apparent that many speculators weren't willing to accept the possibility of excessive volatility at the hands of our elected officials...and I can't say that I blame them.

You can put lipstick on a pig but it's still a pig. The stimulus may be necessary, but it will eventually cause inflation. No one knows what the full package price will be, however we are now approaching $770 billion in round 2 of the "economic stimulus" package. This massive government spending should lift growth, profits and create jobs, although throwing good money after bad never made sense to me. Something must be done to stimulate the economy and the most recent package looks more like an attempt by the new administration to expand government spending as opposed to get us out of this major funk we are experiencing. I am not claiming to be smart enough to have the solution, nevertheless all current solutions seem to lead to printing more money, issuing more debt, and currency devaluation which all lead to inflation.

Commodities are fast becoming the asset class that investors ought to have in their portfolios. Bernanke, Obama and Geithner will be speaking this week hoping to clarify what steps need to be taken to improve conditions moving forward.

We never thought we would enjoy CSPAN, but in this past week's CompliancEX, the February 6th edition, there was a film clip of Representative Gary Ackerman from
Bayside N.Y. taking his shots at the SEC. If we could vote for this guy, we would. He minces no word and just attacked the officials of the House Financial Service Committee for their "see no evil, speak no evil, do no evil" attitude. We need more guys like Representative Ackerman who are not afraid to state the public outrage. Too bad he didn't get onto Thain and his 1.25 million dollar office makeover. We would love to apply for Thain's chauffeur's job at $225,000 per year, with no risks, and full benefits.

CHICAGO and SAO PAULO, Feb. 6 /PRNewswire-FirstCall/ -- CME Group, the world's largest and most diverse derivatives exchange, and BM&FBOVESPA, the largest exchange in Latin America, have announced that the order routing of CME Group products through BM&FBOVESPA's GTS electronic trading platform is scheduled to begin Monday, February 9.

April lean hog futures on the Chicago Mercantile Exchange on Thursday gapped lower on the daily bar chart and hit a fresh contract low of 59.85 cents a pound. Prices remain in a strong 6.5-month-old downtrend on the daily bar chart and there are no early technical clues to suggest a market low is close at hand. The next downside price objective for the powerful hog market bears is to push and close prices below strong longer-term technical support at the 58.00-cent area. For the bulls to begin to regain some upside near-term technical traction, they will first have to push and close prices above strong technical resistance at the last "reaction high" of 63.15 cents a pound.

As the financial sector rescue plan remains in limbo, investors are growing increasingly uneasy with equities. Bank of America shares weighed heavily on the Dow pushing the index well below the coveted 8,000 mark and causing it to under perform relative to the other indices.

There wasn't a lot of economic data for the market to mull over, but the intraday headlines offered significant guidance. The market's attention was focused on Obama's new cap on executive pay to firms tied to bailout money and the Madoff probe in Washington.

Indecisive equities and even less certainty in Washington aided a short covering bid in Treasuries. The 30-year bond and the 10-year note enjoyed a bulk of the buying while the short end of the yield curve dragged a bit. Many analysts attributed the buying to a flight to quality bid, but in my opinion, it was likely driven by technical short covering. With today's gains, the yield on the March T-Bond is nearing 3.5% and the note slipped to about 2.75%.

Yesterday's weak data was relatively bond friendly. The ISM manufacturing index came in at 35.6, dismal but better than the expected 32. Likewise, personal income shrunk at a slightly smaller pace that most were looking for, but a negative number is far from promising.

The new Administration may have its hands full with a total lack of bipartisanship, the new good bank bad bank policy, and a total lack of confidence, evident by the record money on the sidelines and violent selling, showing little signs of stabilization. We expect investors to stay defensive, but when money starts being committed we anticipate some coming into commodities. Being that the infrastructure plan should support in addition to the coming inflation. Furthermore, we expect emerging markets to show more resiliency than most.

CommodityTrader.com is pleased to announce that Matthew Bradbard will be contributing his futures market analysis and commentary to this Blog. Matthew Bradbard is from New England and studied Finance at Northeastern University & the University of Sydney. He has been a member of the NFA since 2000.

Matthew Bradbard founded and remains president of MB Wealth Corporation. Subsequent to establishing MB Wealth, he worked at various brokerages over his tenure in commodities. In addition to being the president and trader for MB Wealth, Matthew Bradbard publishes subject specific articles and a weekly market commentary that you can find in various financial and trading resources. You can find him on websites such as Seeking Alpha, Green Faucet, Pit News, and he's also the commodity specialist for "The Rich Roffman Show", a radio show which is aired in South Florida and online.

Monday:  December income and consumption is released at 8:30, December construction spending is released at 10:00 and January ISM report is released at 10:00. 
Tuesday:  January auto sales. 
Wednesday:  Challenger, Gray & Christmas January job-cut report.  
Thursday:  4th quarter productivity is released at 8:30, December factory orders are released at 10:00, the Bank of England releases its interest rate decision, The European Central Bank releases its interest rate decision, and Philadelphia Fed President Plosser speaks. 
Friday:  January non-farm payroll and unemployment rate is released at 8:30.