2009′ is 3/4 over how is your performance? You've had to pick your points in commodities but for the most part being long currencies against the US dollar and long metals have been the plays. We've had success as well in the softs, i.e sugar, coffee, OJ, and coffee. We feel the big swings today is window dressing with fund managers picking winners so they show exposure in the 3rd quarter... maybe were wrong and it is just the fundamentals finally kicking in??

Oil was higher by 5% today on good volumes. We are positioned long with clients looking for $74 and perhaps $76 on this leg. Call spreads in March coffee and January OJ we feel are buys; contact us for pricing. Sugar is very impressive, we will look to get re-positioned long with clients again on intra-day setbacks. The stock market action was peculiar, we still like being short as long as 1075 in the S&P and 9800 are not penetrated on rallies.

Impressive close in the grains, buying wheat, corn, or soybeans on setbacks is ok with me. There is no need to be in all as they tend to move together. Gold and silver were higher and we are short silver with clients and on the sidelines in gold. We maintain that prices should move lower and will refrain from being sucked long with clients for now. If we change our minds we will tell you and cut losses on silver shorts. We advised clients to take a smaller profit on their long in 30-yr bonds. A complete reversal in live cattle formed a bullish engulfing candle. Mcvean was a big buyer of calls as well as JP Morgan, we hear. Trust me cattle traders want to be on the same side as MCVean (google him/ Charlie McVean). We are advising out right calls in December and February.

The US dollar leaked today, lets wait til' tomorrow before taking any action. We remain short Euro-currency and long yen for clients, though on a trade near 113 in the yen we would advise booking profits.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

A surprise drop in consumer confidence reversed early morning weakness in Treasuries but the bulls struggled to keep momentum. While the recent trend has been higher, bonds and notes face significant resistance.

According to the Conference Board, their confidence index fell to 53.1 in September after posting 54.5 in August. Analysts were expecting an increase to 57. Consumer confidence levels are near the worst levels since the early 1990's. The negative news from the Conference Board overshadowed a better than anticipated Case-Shiller Housing index. According to the index, July marked the 6th consecutive increase in home prices.

Event risk remains elevated throughout the week, so it seems reasonable to expect an increased amount of volatility and fickle trade. We tend to believe that the Treasury market will be finding a relatively meaningful high in the coming week or weeks. The seasonal tendency in this market is for a downturn in early October that lasts approximately three weeks.

Thus far our primary resistance areas of 121'27 in the long bond and the mid 118's in the note, have held. While we prefer the downside, we still acknowledge that there is risk of a spike to 123ish in the 30-year bond and 120 in the note.

Our clients were recommended to sell the December 129 calls for about 20 ticks, but it just wasn't meant to be. The high of the day was 19 and some even tried to adjust the price a bit lower but weren't able to get a fill. We will be working the same order tomorrow but it may be necessary to adjust strike price and premium.

Of course, it is possible to get much more aggressive with this. One idea would be to sell a much closer strike price and another would be to use the proceeds of a short call to purchase a long put.

Treasury Bond and Note Option Trading Recommendations

**There is unlimited risk in naked option selling.

Flat

Treasury Bond and Note Futures Trading Recommendations

**There is unlimited risk in trading futures.

Flat

Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
cgarner@DeCarleyTrading.com
1-866-790-TRADE
Local : 702-947-0701

www.CarleyGarnerTrading.com
www.DeCarleyTrading.com

*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.

There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Do not read into market activity today as volumes were light on the Jewish holiday of Yom Kippur.  As long as crude holds Friday's low we will remain long with clients; November contract $65.05. 

LivOctober expires today in natural gas with November becoming the active contract. Recognize this market still trades in deep contango so overnight prices will appear to jump $1 and this is not the case. We have suggested a 50 cent correction before establishing longs for clients. At this juncture $5 appears to be stiff resistance; a 31.8 Fibonacci retracement takes prices to $4.40 in November. 

Softs were quiet with the exception of sugar gaining almost 5%. We did suggest lightening up on Friday. Hindsight being 20/20 we would do the same being we did not know which way the breakout would be.

The S&P had its' best performance in 2 months today, we got short for clients. This may be contrarian but we advised clients to buy December 1075/1025 put spreads for just over $1000. We reached our objective in the KCBOT/CBOT wheat spread for clients today a t 20 cents premium to KCBOT. 

Corn was a gainer of a nickel, on a move thru recent highs we should see 10/15 more cents. If so we would advise taking partial profits on longs and tightening up stops. Gold and silver were marginally higher, we still feel lower levels are coming. 

December 30-yr bonds were higher by 20 ticks as of this post, clients remain long. As previous posts suggest on  a trade above 122 we will start looking for an exit.

Live cattle futures were relatively quiet but take a look at the spreads; December and February are gaining on April.

The Euro-currency gave up 70 ticks, stay short. The US dollar was higher by 25 ticks, use the 20 day moving average at 77.35 as your pivot point. The yen overnight traded to 1.1341 in the December contract, we remain long with clients looking for higher pricing. Today's' settlement should be closer to 1.1150 so expect volatility.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial.  Past performance is no guarantee of future trading results.

December corn futures at the Chicago Board of Trade have been trapped in a sideways trading range at lower price levels for over two months. This price action is forming a base at lower price levels, for which prices could soon embark on an uptrend. While the "basing" action of the past two months is a potentially bullish precursor to a fresh uptrend in prices, the corn market bulls still have some heavy lifting to do in the near term, to suggest prices can sustain an uptrend. There is strong overhead technical resistance located at the September high of $3.47 3/4 in December corn futures. A push and close above this key technical level would provide the corn market bulls with fresh upside technical momentum to better suggest that a market low and a seasonal "harvest low" is in place. Above that price level lies more chart resistance at the August high of $3.76 a bushel in December corn. On the downside, solid technical support for December corn is located at this week's low of $3.10 a bushel and then at the contract low of $3.02. Major psychological support is located at $3.00 a bushel. Stay tuned!--Jim

Treasury traders are fickle ahead of the Fed's interest rate decision due out tomorrow afternoon. It seems as though the light volume and lack of direction will carry into tomorrow morning but we could see fireworks in post-FOMC trade. The rate announcement is scheduled to be made at a quarter after 2pm Eastern, so that leaves a majority of the session without guidance.

The light volatility has sucked some of the premium out of Treasury options but event risk seems to be keeping option pricing afloat. Nonetheless, with the October options going off of the board and a sideways market there looks to be an opportunity to be a strangle buyer. This isn't necessarily a high probability trade but if volatility explodes, it could be a large percentage gainer. Based on current pricing, it is possible to buy the October note 116 puts and the 118 calls for a combined cost of about 18 ticks or $281 before commissions and fees. Risk is limited to the purchase price and profit potential is theoretically unlimited on either side of the market. It will take a sizable move in one direction to reap the rewards but based on our chart work it seems very possible. We feel that the note will break out o! f its current range with our first support and resistance being found near the strike prices of the mentioned strangle.

On the contrary, if you are a short option trader I recommend being flat. We doubt that the directionless trade will last much beyond the next day or two.

Sorry, but nothing has changed...our overall comments remain the same:

Several sessions of hovering in the mid 119's creates a difficult environment to choose an immediate direction in December bond futures. Rather than force a prediction, we will remain neutral. 119'10ish is still the pivot in the long bond with intermediate-term resistance at 121 and then again near 122. Support can be found at 118 and again at 117'18. Similarly, resistance in the note lies at 118'06 and support at 116'02.

Treasury Bond and Note Option Trading Recommendations

**There is unlimited risk in naked option selling.

September 11- Our clients were recommended to sell the November 128 calls for 18 or better, we are now trying to buy them back for 5 or better to lock in a quick profit of about $200 per contract before commissions and fees.

September 15- Our clients were recommended to change their orders to 6 and were getting filled.

Treasury Bond and Note Futures Trading Recommendations

**There is unlimited risk in trading futures.

Flat

Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
cgarner@DeCarleyTrading.com
1-866-790-TRADE
Local : 702-947-0701

www.CarleyGarnerTrading.com
www.DeCarleyTrading.com

*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.

There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Energies For the last 6 weeks Crude oil has been sideways trading in a $10 range and we don't see this changing in the near future. Traders need to be nimble and pick their spots carefully. We prefer buying dips closer to the bottom of the range. Presently clients hold December $75/.80 call spreads. On the November contract the next leg should be determined on a trade above $73 or below $69. Heating oil and RBOB continue to play follow the leader and we have no trade rec's at this time. Natural gas has come alive and those that stayed with their November and December positions should have made some money on the recent 30% explosion in prices. We've advised clients to book partial profits on their positions. We will be looking to get long December or January contracts on a setback of 40-70 cents. We see no reason why the January contract will not see $6/btu in coming weeks.

Livestock Live cattle prices broke lower last week trading to their lowest levels of 09'. This should be viewed as a buying opportunity as we suggest traders to get long December futures with at the money put protection, buy call spreads in February live cattle or price out calendar spreads. See our special cattle report published last week. At this point we would suggest liquidating all profitable longs in lean hogs. We are expecting a setback if prices penetrate the 20 day moving average; in December at 49.85. We will be recommending longs on a further setback thinking we should find next support at 45/46 cents.

Financials

Stocks: Last Thursdays' highs in the Dow and S&P look like a sign of exhaustion and unless new highs are made this week we would expect a correction to follow. For the Dow that level is just below 9800 and on the S&P at 1072. As we've hinted at in the past we are anticipating a move back to the 50 day moving averages, 9200 and 995. Investors who are unwilling to liquidate some of their stock holdings may consider buying ES puts as a way to hedge; November 975 puts $800, December 950 puts $950, December 1050/1000 bear put spreads $900 (as of Monday morning).

Bonds: The story this week in the Treasury complex may be the flow of money. What does that mean? If equities and commodities sell off we would expect money to flow into US dollars and to Treasuries, that being said we may see a temporary bounce. Some clients are currently holding December call spreads and carrying a small loss. If our assessment is correct look for a trade up to 122'00 in coming weeks in the December 30-yr bond contract. Traders not willing to take a directional move may consider NOB spreads with their bias towards their position in bonds, (i.e. long bonds/short notes). Continue to fade rallies in long dated Euro-dollars via futures and options. Look for the FOMC to leave rates alone this week but we feel the key is on how they view the latest market recovery and if they hint at when rates will start moving higher.

Currencies The US dollar appears to have put in an interim base last week as a rounded bottom is being formed. This will not be a "V" rally but we do expect a bounce from here as long as last week's lows hold. Traders should pay attention if a rally pursues how prices react to the 20 day moving average; 77.80 on the December contract. We would suggest exiting all longs on int'l currencies and aggressive traders can get short with stoops above the recent highs. We have clients positioned short December Euro-currency and will be looking to add to that position and get clients who don't have exposure some light exposure. We expect a trade down to 1.4250 in the coming weeks.

Grains Freeze or no freeze that was the driving force last week in the grain complex. With crops going in late there is little margin for error so on an early frost with potential crop damage grains could find support. We are still suggesting long exposure in corn and wheat as long as the fresh lows hold. Additionally we suggested a trade idea in wheat last week; buying December KCBOT futures against December CBOT wheat. This trade was put on between 13 and 13'4 cents premium to KCBOT. We are risking 5 cents looking to make 10 cents for clients. When we are convinced a low has been made in agriculture we will also be suggesting accumulating March oat calls. Stay tuned.

Softs This sector is ignored by a majority of commodity traders but if you look at several of our most successful trades for clients of late they have been in markets like sugar, coffee, and OJ so we suggest becoming more familiar with this sector. As we've pointed out in recent weeks if and when the US dollar gains traction look for cocoa to turn south. If you saw the volatile action last week, this market is not for the faint of heart. We are suggesting options as opposed to futures for that reason. Contact us for pricing. We still like being long sugar and have clients currently positioned in March 10' contracts. We are currently pricing out bearish plays in cotton, stay tuned.

Metals Gold and silver have been making headlines of late moving to near record highs in gold and 12 month highs in silver. It may be justified being we've seen a 10% appreciation in gold and 30% appreciation in silver from high to low in the last 30 days. We were able to take advantage of those moves for clients but we've suggested exiting for the time being expecting a violent wash out. On a trade back under $950 in December gold and $15 in December silver we will be getting clients long again.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

This week the Gold and Silver markets have been on a "Bullish Tirade" fueled by many economic factors. On Tuesday U.S retail sales revealed producers surged higher than expected indicating business was improving. Federal Reserve Chairman Ben Bernanke was quoted as saying "Even though from a technical perspective the recession is very likely over at this point, it's still going to feel like a very weak economy for some time"
 
New jobless claims dropped unexpectedly last week. The number of new filings for laid-off workers seeking unemployment benefits fell to its lowest level since July.
This is certainly an indication that job cuts are slowing. The actual number released was 545,000. The Commerce department announced that housing starts And permits reached a 9 month high. The Governments $8,000 tax credit (for first time buyer) and Low Mortgages were cited as significant housing sector support.
 
However the most significant reason for this current rally in the precious metals has been from speculators and technical analysis.Obviously the current U.S Dollar
"WEAKNESS 'is a constant driver to fuel the rally. Especially when the Dollar Index value against six other major currencies and at its lowest level in over a year. With the U. S dollar under constant attack it reminds me Of "SHARKS to BLOOD" any crack in the dollars façade Sending investors to the precious metals/GOLD & SILVER.
 
As of this writing (9/17/09)...Gold has a $1013.50 value (per oz.) while Silver has settled at $17.34(per oz) at these levels many traders are feeling a bit reluctant to buy Gold and Silver. Consumption of both these metals are being strongly encouraged
By the Chinese Government to their citizens. The Government of China is warning its citizens to own "TANGIBLE ASSETS" or "HARD MONEY "in anticipation of pending inflation. In other words "BUY GOLD OR SILVER".
 
We are still in the heart of India Festival and Wedding season and the anticipation of a last minute buying surge by India's Jewelers who are the largest consumers of Gold in the world will inject some new fuel into both the Gold and Silver markets.
 
The recent rally in the Crude oil and decline in Government Bonds also are guiding professional and rookie investors alike toward (INFLATIONARY TESTED) precious metals. Silver certainly is the better priced and quite frankly may have more upside appeal due to its duo status as a precious metal and it's usefulness as an industrial metal.

Mike Daly /Gold Specialist
PFG BEST
mdaly@pfgbest.com
312-775-3014
877-294-4669

Soft red winter wheat futures for December delivery at the Chicago Board of Trade on Tuesday hit a fresh contract low of $4.50 a bushel. Prices are in a steep 3.5-month-old downtrend on the daily bar chart. There are no early technical clues to suggest a market bottom is close at hand. Since the June 1 high of $7.25 1/4, December wheat has dropped around $2.75 a bushel, or around 40% in value.

The next major downside price objective for the still-powerful wheat market bears is major psychological support at $4.00 a bushel. For the wheat market bulls to gain some fresh upside near-term technical momentum to begin to suggest that a major market low is in place, they would have to push and close December wheat futures prices above strong flat-line and trend-line resistance at $4.85. Above that lies major psychological resistance at $5.00. The wheat market bulls do have "seasonality" factors on their side. Seasonality in agricultural markets is the tendency of market prices to trend in the same manner during a given time of the year, due to growing, weather and harvest patterns that change very little, overall, from year to year. Seasonality studies for wheat futures do show prices rallying from the present timeframe into the end of the year. Stay tuned! Jim Wyckoff

Energies Crude oil is trying to make a decision on where to go from here, the way I see it on a breach of either $73 or $67 in October that will determine if prices move higher or lower. With peak driving demand and hurricane season behind us it we could get a spike lower but for now we have clients positioned in December $75/80 call spreads. Though no exposure for clients in RBOB or heating oil we continue to feel they will follow Crude higher or lower. Natural gas has bounced 56 cents off the recent lows as of Fridays' close and intra day was almost 50 cents higher. We recognize this is short covering but could this be the beginning of a larger move? Being the sentiment is so bearish we think yes. Clients in October will lose money but we continue to think longs in November and further out should make money. We like the idea of buying December and January this week on a setback. Remember when looking at prices this market is deep in contango so $5/$6 a few months out we believe is very possible even though the front month is under $3.

Livestock A sideways market still exists in cattle but we maintain our bullishness and would recommend long exposure. We have been creative in our cattle trades for client's thanks in large part to a livestock CTA with 30 plus years experience we trade with. They feel we are in the beginning stages of a 2 year bull market in cattle and we concur. We have been starting to buy outright longs but for the most part have been trading live cattle calendar spread with some success. Contact us for a further explanation. On behalf of clients we have now taken off all of their October and a majority of their December lean hogs contracts. Haven taken advantage of the recent 10 cent advance in the futures market we suggest looking for a pullback to get re-positioned long again.

Financials

Stocks: Whether we agree with the recent appreciation in equities is inconsequential, stock markets have continued to march higher just with out our clients. As a trader you sometimes need to ignore your opinions and feelings and just listen to the market. On a trade above 1050 and 9600 in the S&P and Dow respectively we would most likely see more upside. Look for the CPI and PPI to guide this week as the markets prepare for the FOMC meeting the following week. We do expect a test of the 50 day moving averages in coming weeks but at this point do not know what the catalyst will be for a sell-off. In the S&P that level comes in at 975 and in the Dow 9000.

Bonds: Treasuries remain a traders market as they continue to act indecisively swaying to and fro. We instructed clients to lift their October 10-yr note puts at a slight profit and to remain long the December 30-yr bonds. On a new high this week we should see bonds trade through 123'00, at what point we would most likely lift their longs. We continue to advise clients to use rallies in the Euro-dollar to buy long dated puts and to short futures. This strategy is not about a quick profit but rather building a short position in an instrument that should topple not necessarily when we start raising rates domestically but rather when the inflation sentiment shifts.

Currencies The moves south in the US dollar continues as we are now at the lowest level since September 08'. I cannot dispute the trend is down and we may see lower ground but the problem I have with that theory is that everyone feels that way and usually when that is the case everyone is wrong. The daily and weekly charts show little support but we still caution investors about getting too short dollars or too long commodities. All international currencies have broken out of their recent sideways pattern with the yen's move last week being the most impressive gaining 2.6%. We are pricing out longs in the yen for clients and will have some ideas on a set back this week. Being long the yen in September has been a profitable proposition 24 out of the last 32 years. Past performance is not indicative of future results. Last week the BoE kept rates unchanged at 0.50% and the BoC left rates alone at 0.25%. The only currency exposure we have with clients is a small short options position in December Euro-currency which is currently under water.

Grains The USDA report came out largely in line with expectation showing a mammoth crop in both soybeans and corn. The markets were largely unaffected as this had previously been priced in. We currently have no exposure in soybeans or the derivatives of and at this point have no trade recommendations. Over the years I have found in the agriculture sector that the oats market is generally the first grain market to move and it looks like we may have formed a bottom. On the December contract as long as$2 holds we like re-establishing longs in corn and wheat with one eyed focused on the oats market. We are suggesting client to be long March 10' CBOT wheat futures with stops below the recent lows. In corn we've been suggesting close to the money December and March calls or to get long futures with options protection. Contacts us for more details.

Softs On a dollar rally cocoa prices should fall, at this point we have no short exposure with clients but we are pricing out various strategies. They include futures and options plays such as calendar spreads, back spreads, getting short futures and selling puts against the futures as well as straight put options. One should note that we had clients in October puts that recently expired worthless. Getting short September cocoa in mid-September and holding until late November has worked 28 out of the last 36 years. Past performance is not indicative of future results. Client's hit their objective in their coffee longs last week making just shy of 200% in less than 2 weeks. Not too bad of a trade, I only wish we had more of these. We suggested for clients who did not already have long exposure in sugar to buy March 10'calls last week. As long as 22 cents holds we fully expect a re-visit if the 25 /26 cent level in coming weeks. In the last 30 days OJ prices have lost just over 20% and now prices are starting to look ripe for a pop higher. We are suggesting a light long position in November with stops below last weeks' low and also buying the January $1.00 calls for $850/900.

Metals It is difficult to read a newspaper or watch television without hearing about precious metals moving higher. That being said we have advised clients to take profits on ALL their longs in gold and silver and to move to the sidelines. That may be a little counter intuitive but we feel a violent correction is coming followed by a much larger move higher. We would suggest keeping your powder dry and be ready to pounce on this correction as we are getting clients ready to purchase both gold and silver contracts into next year. In a perfect world we would get a $70-100 correction in gold and $1.50-2.50 correction in silver. The fact that copper prices have failed to penetrate the $3 level we think that spells a correction. Being we started the year with prices closer to $1.30 why couldn't we see a 40/50 cent set back?

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

Gold Closes $9.60 HIGHER Today... ($1006.40) Gold rallied to its highest level since March of 2008. This session concluded the 4th straight week Gold has advanced. There are many reasons for this latest surge in Gold such as Extreme weakness in the U.S. Dollar versus the Euro, higher Energy prices as of late, and the recent Geo-political tensions on the Israeli and Lebanese border (rocket exchange) just to name a few.

The tremendous demand for Silver both as a precious metal and an industrial metal has been over whelming as demand is exceeding supply...Thus December Silver traded as high as $1701.5.

The U. S Dollar is basically going down in anticipation of upcoming inflation. These inflationary fears are sending investors running for "SAFER HAVENS". Precious Metals fits this bill.

THE FOLLOWING ARE MY SWING NUMBERS FOR MONDAY 8/14/2009

2ND RESISTANCE..................$1015.00

1ST RESISTANCE..................$1010.00

PIVOT..................................$1007.00

1ST RESISTANCE..................$1002.00

2ND RESISTANCE..................$999.00

Mike Daly / Gold Specialist

PFG BEST

mdaly@pfgbest.com

877-294-4669

312-775-3014

**THERE IS EXTREME RISK TRADING FUTURES,OPTIONS.AND FOREX**

Despite relatively large intraday swings, bonds and notes ended the day nearly where they began. Treasuries were under pressure for much of the day but the Fed's Beige book reminded the market of the troubles still facing the economy. Similarly, the equities weakened slightly following the Fed's interpretation of the economy and this likely helped the Treasury bid.

The Fed's Beige Book was somewhat optimistic in that although it wasn't positive, it did suggest improvement. For example, retails sales were noted to be "flat" but that is better than what we have been seeing.

The 10-year note auction went relatively well, but it takes a lot to impress this market. The Treasury re-opened $20 billion in 10-year notes at a rate of 3.510% and a 2.77 bid to cover.

The real story in recent days has been the U.S. dollar which has suffered considerable losses. After being range-bound for what seemed like an eternity, the dollar index finally. In our client newsletter, we pointed out seasonal tendencies for the Euro to rally and the dollar index (comprised 60% of the Euro) often struggles in early September. However, we also stated that we think that following a dip to the mid-76's may be a longer-term opportunity for the bulls. Today's lows in the greenback are approaching our target. We may not have seen the absolute intermediate-term low in the dollar index quite yet, but we think that we are getting near. Eventually this could work in favor of bonds and notes.

Treasuries seem to be breaking all of the rules...or at least they are breaking our rules. The 30-year bond broke through our critical pivot near 118'15 but failure of the 10-year note to follow, along with the late day recovery leaves us on the fence. Perhaps in the next few days, things will clear up enough to get a grasp on where the market goes from here. In the meantime, we will look for a bullish opportunity in the long bond near 116 but still plan on being bears in above 121.

The note, on the other hand, has managed to maintain its bullish bias and still looks like it is destined for the mid-118's in the December futures contract.

Our idea to be a seller in the 5-year note near 116 turned out to be a good one, but we think that the market could be headed for 116'08ish from here.

Energies Crude has moved lower for the last 2 week, losing almost $5 last week. That being said no damage has been done to the charts and we still like being long. Support is seen at $67 in October with resistance first at $70 followed by $72. Clients are positioned in December $75/80 bull call spreads. The distillates should follow oil but we have no exposure currently for clients. Natural gas finished lower last week but we did have a bullish engulfing candle last Friday. We have been fooled before but this could be the bottom. We are down in virtually all our client's longs in natural gas but if any market can get that premium back this is it. The $2.50 level should hold in October, a 50% Fibonacci retracement could carry price back near $3.50. Clients with a 60 plus day time frame should look to gain long exposure. OPEC meeting this week.

Livestock

Live cattle are trading sideways but from our viewpoint a base is being built for a substantial move north. Option traders can get long December or February. Futures traders could get long either month with option protection. How we have most of our clients positioned is long February and short October. We expect live cattle to be 4-7 cents higher over the next 60/90 days. We are not trading feeder cattle currently but the same circumstances exist, prices are basing out and should be moving north in the coming months. We've advised clients to take their longs off in October in lean hogs and book a profit. On a move higher this week in December we would advise the same. It is not that we do not see more upside but for a market to go from oversold to overbought in 3 weeks we feel if you have a profit book it. On a set back we would most likely look to get long again.

Financials

Stocks: Two sided trade in equities as the recent move may be running out of gas. Historically speaking the next 60 days is not kind to equities so we would rather be seller of rallies or in cash on the sidelines. Though we may not be active trading indices we would suggest following their movement as their influence on other markets. A move above 1040 or below 990 should signal the next leg in the S&P, in the Dow above 9660 or below 9225.

Bonds: Strictly off the charts Treasuries look as if we've seen an interim top last week but that could change at any moment. We have clients positioned long in December30-yr bonds thinking on a stock market correction the flight to quality should flow to bonds but as a hedge we advised October 10-yr puts against the 30-yr bond longs. A trade that you will hear continuously from us is selling rallies in far dated Euro-dollar contracts. For options we are advising June 10' puts.

Currencies

The dollar has fallen off a cliff and until we get a relief rally the path of least resistance is down. If the dollar weakness persist look for more upside in int'l currencies. As of this post all seem to be breaking higher out of their recent trading ranges. We would give it a day or two to see if this is real. If it is, traders could buy setbacks in all currencies with stops below the recent top of the trading ranges. We should have some ideas mid-week in our blog.

Grains

Prices of grains continue to chop lower as a bottom is yet to be determined. We would like to think on an early frost, increased exports or a surprise on this week's USDA a bottom is found. Wait and see! For now we are long and wrong in December wheat and corn for clients. We think these calls are correct but we just committed too early. December corn back at $3.70 and December wheat back at $5.70 we think is still feasible over the next few months.

Softs

We view the current pullback in sugar as profit taking and will remain long with clients and advise traders who have yet to gain exposure to view this as a buying opportunity. We would suggest trading the March 10' contract. We have yet to figure out a way to get long cotton but have been pricing out a few different strategies. Stay tuned. Outside of sugar our only exposure with clients is long coffee. Last week we suggested clients to sell puts in March 10' and to buy calls in December coffee. We believe last weeks lows should serve as solid support. Our upside targets are 128, 130.50 and then 133 in the December contract.

Metals

The mythical $1000 level has been breached in gold as of this morning. From here where do we go? Longer term we feel there is much more upside but at this juncture we think too many investors are piling into the gold. In other words this trade is becoming crowded. By no way are we saying get short but we have advised clients to take profits on longs and wait for a setback to get positioned long again. Our preferred way to play metals remains long exposure in silver. We have a majority of our clients in December call spreads. We've started to look for an exit and will likely get re-positioned long in the March contract on our next entry. Silver could approach $19/20 ounce by years end but we doubt we will go there in a straight line.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

click the chart to enlarge

The Continuous Commodity Index (CCI) is a basket of 17 major raw commodity futures prices rolled into one composite price index. It's an excellent gauge of the overall trend in commodity futures prices, as well as commodity price inflation. See on the daily chart for the CCI that prices have backed off from the summertime high. At present, there is the specter of a big and bearish double-top reversal pattern forming in the CCI. If prices drop below the solid technical support level seen on the daily CCI chart, then the bearish double top would be more likely to be confirmed and odds would increase that the CCI would trend lower in the coming weeks. Right now, the CCI is in "no man's land" between the key support and resistance levels on the chart. Stay tuned! Jim Wyckoff

Chaos among the equity indices lured some buyers into Treasuries but the bulls seemed to be a bit timid. It wasn't until yesterday's late afternoon trade that the 30-year bond finally made its way well into positive territory.

Despite the positive close, the bond traded nearly a handle in the red this morning following a better than expected ISM report and pending home sales. The ISM manufacturing index was expected to show slight growth near 50.50 but was reported at 52.9. Likewise, construction spending can in flat against analyst expectations for a slight draw. Perhaps the most optimistic of today's news was a 3.2% increase in pending home sales. In the absence of a stock market plunge, Treasuries may have experience a much different trading session.

The short end of the curve has been outperforming the long and today was no exception. This is true even in the fact of dismal yields on such securities. We have been noting investors quietly flocking toward "quality" and this is another sign of the lack of confidence that the marketplace has in regards to the near-term prospects for the recovery.

We would love the opportunity to be bearish this market, but feel as though any attempts at such are a bit pre-mature. We see resistance in the December bond futures near the mid 121's but see potential for a spike to 122'22ish. On a weekly chart, there appears to be a thick ceiling near 124. That said, we like the idea of selling calls, buying puts or both as a spread using the October options should the market approach the 122 area. We are wondering if the market may spike higher following Friday's employment report and this could be a great opportunity to "get short" with futures or options. We will be scanning the markets for ideas.

If you are trading the 10-year note, we have been looking for about 119 in the September contract but in the December our target is about 118. Today's high of 117'24ish isn't far off the mark but we would like to respect the rally. I think that there may be a bit more room on the upside. That said, the financial markets made rather large moves today, it wouldn't be unusual to see some back and filling in tomorrow's session.

We mentioned yesterday that traders could start looking for a potential reversal in the 5-year note near 117, in the December contract this translates into 115'25 which wasn't far from today's highs. Technically, this contract should be getting toppy but bears should recognize that the 10 and 30-year securities may creep a little higher and they could bring the 5-year with them.

You should be trading the December contracts!