June has come and gone ...to all a happy Independence day...see you in July. Crude should finish slightly higher but again today prices were unable to take out the 18 day MA; in August at $96.25. On a trade above that level our next target would be the 40 day MA at $98.80. At this juncture we're assuming an interim bottom was established this week just above $90 in the August contract. As RBOB and heating oil trade higher we feel they could propel Crude back near $100/barrel. Wild trade in natural gas today with a 21 cent trading range... at the end of the day a bullish engulfing candle should mean higher ground. We're thinking another 5% from here and have advised longs in September. In the last two weeks indices have gone from over sold to overbought and at this point we feel the 2% advance in the last four days is too much. We will likely be selling into this strength as we anticipate a return to 1275 in the coming weeks.

The dollar has lost ground the last four sessions and we maintain a trade back under 74.00 in the coming weeks. The commodity currencies remain the standouts and the Loonie is the pick of the litter in my opinion. On their lows August live cattle completed a 38.2% Fibonacci retracement...we expect a trade to the 2o day MA another 2% from current pricing. Lean hogs posted a 2 1/2 week low doing minor chart damage so expect more downside. Bearish engulfing candle in gold with a settlement below $1500/ounce. As long as $1485 holds in August on a settlement basis we suggest remaining in bullish plays. We hold small long overexposure with some clients in silver but we would like to see a settlement above the 9 day MA in the coming sessions to be convinced the downside is behind us. That level is just above $35/ounce in September.

Cocoa advanced to a two month high and has gained nearly 7% this week. We continue to work out of long for clients thinking we're nearing an interim top. It appears we're seeing triple top in the making in sugar as prices broke just over 2% today. Our clients shorts are under water but if you stay the course we should see a significant break in the immediate future. Remember we were at 23 cents just over one month ago and that remains our target in October. Bearish is an understatement in terms of the reaction by grain traders to this morning's USDA report with corn and wheat trading down their respective price limits. We suggest buying corn closer to $6/bushel as prices will likely be limit lower (45 cents) tomorrow. Some clients are long soybean oil and wheat and though painful today we feel will be profitable in the next two/three weeks. The numbers today were bearish corn but my interpretation was neutral to mildly friendly in the other grains and talking to farmers I think the USDA has discounted the less than ideal weather way too much. We advised clients today to offset any short exposure in 30-year bonds and 10-yr notes. If they want to keep exposure in this complex we advised moving to the short end of the curve in December 2012 contracts.

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

The dollar and Treasuries breaking down and commodities and equities advancing...is this correlation back? The 9 day MA In August Crude has shifted to support now at $93.50 with resistance at the 18 day MA at $96.50. We remain cautiously bullish with a target in August future of $100/barrel. Crude 2% plus advance was driven by the 4.25% appreciation in RBOB and 3.25% gain in heating oil. Hedgers should have at least 40% of their fall hedges in place using the recent set back to gain ground. Natural gas closed lower for the first time in four sessions ...stay the course as $4.50 should be obtained in coming weeks...in my opinion.

The indices are getting close to our objective being the 50 day MA is 1307 and the 100 day MA is 1309.50 in September S&P futures. Failure to breach those levels in the coming sessions would likely mean a trade back to 1275...trade accordingly. The dollar index broke the MA's mentioned in previous posts and we should see a trade back near 74.00 into next week. As we alluded to yesterday with a trade higher in commodities the commodity currencies outperformed today; the Loonie higher by 1.27%, the Aussie 1.39% and the Kiwi 1.75%. Our pick is the Loonie and strength in the metals and energy complex should help lift prices to 1.0400.

Remain on the sidelines in livestock looking for a lower long entry in both lean hogs and live cattle. Gold and silver have likely began their next leg higher with gold advancing $11/ounce today and silver picking up an impressive 3.75%. August gold should find its way back to $1550 in the coming weeks and in September silver we should see $37/ounce. We hit our target in cocoa today and have advised clients to start lightening up. We see little resistance for another $150 so cut your size if you have multiple positions as opposed to leaving the entire trade. October sugar failed to make a new high but our clients bearish trades are still way under water...this should be a winning trade in July if you're willing to stay with it...again our target is a trade back near 23 cents in October futures.

USDA report out in the AM tomorrow so expect fireworks. We will carry longs in CBOT wheat and soybean oil into the report and be willing to buy corn and soybeans on a break. The chart in wheat looks the best as long as this week's lows hold. Three days running 10-yr notes and 30-yr bonds might finally be breaking down. Just a touch more and we will be putting in profit orders on clients shorts. Also one could fade rallies in long dated Euro-dollars...late 2012 contracts is our suggestion.

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

Crude advanced 2.30% as of this post and is on the verge of penetrating the 9 day MA for the first time in nearly three weeks. A settlement above $94 in August should be followed by a trade up to at least $98 in the coming weeks. The fact that the distillates are finding a bottom should lend to a leg up in Crude. RBOB is 15 cents off its lows from yesterday and heating oil has bounced 10 cents...stay tuned. Natural gas picked up just over 2% and will close over the 9 day MA. Goldman is covering their shorts and as we've voiced in recent sessions a 10% appreciation from here is what were expecting...trade accordingly.

Indices traded to their highest level in one week and should be on their way to their respective 100 day MA's ...1307 in the S&P and 12160 in the Dow. The dollar index will lose 0.40% today and selling should pick up on a breach of the 20 day MA; at 75.15 in September. Expect the commodity currencies; the Loonie , Aussie and Kiwi to outperform if commodities continue to appreciate in the short run. Live stock was a marginal gainer but we would still like long entries from lower levels in hogs and cattle with our clients. Gold and silver held onto slight gains today and as we voiced yesterday our suggestion is purchasing call spreads in October gold and December silver. We are early and will look to add to this trade once the train gets moving north again which we feel is sooner rather than later.

Cocoa backed off its highs but mid-day traded above the 200 day MA...we are looking for more upside. The 4.25% appreciation in sugar did not help our clients shorts today with prices advancing to six month highs. Our target in the October contract remains 23 cents but we did not expect to take this much heat. Ags are starting to find buying ahead of Thursday's USDA. We suggest buying December corn, November soybeans, September CBOT wheat and September soybean oil. Do not get involved in all though as there will likely be a strong correlation in grains in the coming sessions. As of this post both 10-yr notes and 30-yr bonds have broken their respective 20 day MA's. Clients that held on are finally getting some premium back! The short end of the curve, i.e. long dated Euro-dollars are also rolling over...

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

August Comex gold futures prices Monday morning hit a fresh five-week low of $1,491.70 an ounce. The gold market is tentative to start the trading week, as Greece's parliament is scheduled to vote later this week on fiscal and austerity programs, amid the European Union debt saga that continues to play out and which continues to impact many markets, including gold. Some near-term chart damage has been inflicted in gold following Friday's bearish weekly low close. Recent price action has also seen August gold drop below what was major psychological support at $1,500.00 an ounce. Indeed, the bulls have faded and need to show fresh power soon to avoid more serious near-term chart damage. Importantly, gold bulls still have the overall longer-term technical advantage.

Prices are still in a 10-year-old uptrend on the longer-term charts. However, the shorter-term uptrend on the daily chart for August gold futures has at least temporarily been negated. Gold bulls' next near-term upside technical objective is to produce a close in August futures above strong technical resistance at $1,530.00. Bears' next near-term downside price objective is closing prices below solid technical support at the May low of $1,464.10. First resistance for August gold is seen at Monday's high of $1,506.10 and then at $1,511.40. First support is seen at Monday's low of $1,491.70 and then at $1,485.00. Stay tuned!

It does not take much in the way of volume to move markets in thin trade so be careful. Wind was taken from the bulls sales in Crude this week as prices traded down to seven month lows. August Crude is finding buyers at $90/barrel but that level will need to hold or prices could see $85 in the coming weeks. Some clients are long from higher levels and I'm thinking we see $95 before $85. The distillates will need to bottom before we see any upside in Crude as well. That did not happen today with RBOB lower by 1.50% and heating oil down 0.50%. The last two occasions in the last three months natural gas was at current pricing it was a buy. Past performance is not indicative of future results. Our suggestion is purchasing September bull call spreads.

Sloppy sideways action as of this post indices are almost at the exact point we started the week. Next week we will see if the 200 day MA can hold...if it does we may have some bullish trade recommendations. The dollar is approaching its highs on the week but we don't anticipate a trade north of 77.00...trade accordingly. The Loonie failed at the 20 day MA closing down nearly 1%, we suggest cutting losses on any long futures. Lean hogs have lost 3% in the last three sessions but we expect a trade down to the 20 day MA another 2%. We would like to see a 3-5% dip in live cattle before re-establishing longs for clients. Gold and silver gave up the ghost in the last two sessions with gold down over $50/ounce and silver giving back nearly $2/ounce. Some clients have light long exposure via options and are carrying a loss but for now we choose to stay the course.

Cocoa held the 20 day MA on today's pullback and in our eyes is still a buy. Sugar remains a sell though clients who are short are carrying a loss our target remains 23 cents/lb in October. On the week grains traded down but at these levels we feel longs should be scaled into with long exposure into next week's USDA. That goes for corn , soybeans and wheat. Our clients hold bullish positions in soybean oil and wheat and likely will be gaining some new crop corn exposure next week. Treasuries failed to breach the 20 day MA if this carries into next week clients will likely cut loses on their September bearish plays in 30-yr bonds. As for the short end of the curve prices have started to consolidate for what could be a leg lower...stay tuned.

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

In my career generally the hardest trades have been my most successful. Buying on days like today is not easy but likely the correct move. The EIA's move of releasing SPR's will grab headlines in Crude but in our opinion will be a moot point by next week if not sooner. We consume north of 80M barrels a day and they are releasing 60M barrels...do the math. Today's candle in Crude was ugly but we did pare loses trading $2 off the lows as of this post. Analysts are screaming $85/barrel I don't see it. We suggest using weakness as a buying opportunity but in full disclosure we recommended clients to buy from higher levels. It's called hedging for a reason...heating oil and RBOB got hit hard today...thankfully we advised clients to scale into their fall hedges. Natural gas gave up 2% today closing at a five week low. We've advised clients to purchase September bull call spreads. An additional trade idea would be to buy December 2011 and sell December 2012 3:1 call options. Inquire for exact strategy but it is a longer term bullish play with little out of pocket cost.

As of this post indices have fought back to almost get positive on the session...very impressive considering early trade. The dollar should close about 0.70 higher but well off its highs. Without follow through tomorrow we still feel south from here. Use last week's high as your pivot point...in other words when we'd admit we're wrong. As for trading the only play we have is buying the Loonie. Lean hogs should trade lower perhaps back to the 20 day MA; in August at 92.75 stay tuned. Selling was rejected in live cattle today after filling the gap from early this week. We missed the buy for clients but buying dips remains on our radar. Gold down 2% and silver off by nearly 4% was not what we anticipated but we like the late day rally and are feeling a little better about our clients long exposure. August gold will need to hold $1510/ounce or things could get extremely ugly. Some clients have light exposure in October call spreads. Silver remains sideways trading back near the bottom of the recent trading range. We like buying but if $34 in July gives way look out below. We would not suggest owning both gold and silver at the same time as they will likely move together.

Cocoa breaks below the 20 day MA or above the 200 day MA and there you go...we like being long. Sugar bounced off the 20 day MA closing 7.5% off its lows. We suggest fading rallies anticipating 23 cents/lb in the coming weeks. Mixed bag in Ags but as we said use this setback to gain long exposure ahead of June 3oth USDA. We closed well off the lows and corn, soybeans and wheat are a buy on dips in our eyes. Treasuries are back at their highs which means a higher selling point but all this trade has done is lost clients money. We will likely walk away until a top is confirmed.

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

I'm not smart enough to know what is better for the economy inflation or deflation but I do know that things cost more than they used to and I thought that was inflation. Maybe I need to go back to school...isn't it that easy Ben? Crude oil picked up ground for the third consecutive session today carrying prices back near the 9 day MA at its highs. As we said yesterday we would need to see the distillates turn before Crude could reverse...low and behold RBOB was higher by 3% and heating oil advanced nearly 2%. Look for further evidence in the coming sessions and then we should be in bull mode again. Natural gas made a new high and failed but being the recent sell off has dragged prices to oversold levels we like gaining long exposure. For now our suggested play is purchasing September bull call spreads.

Inside day in the indices and the rally up to Fed may have seen enough. If we fail to trade above 1295 this week prices will likely head back to 1265. If long trail stops to protect profits. The Pound broke down today being the biggest loser down over 1% as of this post. Chart damage was done and we have shifted our bias form bullish to bearish here. The Loonie is still a buy in our eyes and should gather steam if metals and energies advance. Move to the sidelines in live cattle and lean hogs and let prices back off so we can re-establish longs from lower levels. Both gold and silver held onto small gains but are currently trading well off their session highs. We maintain our bullishness and think both metals should be accumulated at these levels.

Cocoa has touched the 200 day MA twice in the last three week but in both instances gains were capped. On a trade above 3055 in September look for upside momentum. Sugar is a sell...a near 25% appreciation in the last five weeks is not justified in our opinion. A bloodbath is the only way to explain the action in agriculture today. Clients will be advised to buy this dip and be long into June 30th USDA report but unfortunately some are already long wheat and soybean oil and today was not kind to them. Remain long but recognize the damage may not be done. We feel wheat should trade back near $8/bushel by late June early July that is why we've held on. As we voiced yesterday Treasuries look heavy but they have for weeks. A trade below the 20 day MA should signal an interim top; that level is 125'7 in 30-yr bonds and 123'07 in 10-yr notes.

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

Comex gold futures prices are trading modestly higher Tuesday, as higher crude oil prices and a weaker U.S. dollar index are supporting the precious metal. As continues to be the case, crude oil and the dollar index are leading most commodity markets in price direction, including gold. August Comex gold futures bulls have the overall near-term and longer-term technical advantage. A 4.5-month-old uptrend is in place on the daily bar chart, while a 10-year-old uptrend remains in place on the longer-term monthly chart. Bulls are slowly regaining near-term upside technical momentum.

Prices have been creeping steadily higher since the sharp drop in early May that took August gold prices down to $1,464.10. It's the slow and unassuming price uptrends, such as that in gold at present, which are the most likely to continue. Gold bulls' next near-term upside technical objective is to produce a close above solid technical resistance at the June high of $1,555.00. Bears' next near-term downside price objective is closing prices below solid technical support at the June low of $1,511.40. First resistance is seen at Monday's high of $1,548.20 and then at $1,555.00. First support is seen at Tuesday's low of $1,539.30 and then at Monday's low of $1,533.60. Stay tuned! Jim Wyckoff

A rising tide lifts all boats! As stocks increase and metal bulls get back in the driver's 's seat look for commodity appreciation. Crude manages a slightly higher close but the real story is the prices should settle $2 off their intra-day lows as trades below $92/barrel were rejected in August. If the distillates did not trade 1-2% lower today we would have likely seen more appreciation. On signs of an interim bottom in heating oil and RBOB that should signal a turn higher in Crude. Six out of the last eight sessions natural gas has lost ground with prices approaching levels not seen in five weeks. We have buy targets with longer time frames on our radar but have yet to commit client capital...stay tuned. 1250-1255 has served as solid support for the last week in the S&P. Aggressive traders could work into longs with an initial target of 1300 in September futures.

The dollar backed off slightly but did hold the 20 day MA; in September at 75.25 which should serve as the pivot point. We see no currencies that scream buy or sell but aggressive traders could be starting to scale back into longs in the Loonie. The best performing sector of late could go to livestock; lean hogs have appreciated 12% in the last two week, feeder cattle are up by nearly 10% while live cattle bring up the rear gaining 8.5%. Gold and silver were only slightly higher but we like the chart formation and anticipate a leg higher to commence any day now. We expect August gold to make a new contract high in the coming weeks and could see July silver near $40/ounce.

Cocoa bounced off a triple bottom and is back over the 20 day MA. We suggest getting long at these levels with a target of 3100 in September. Sugar was higher by 4% today breaking out to 3 1/2 month highs. Some of our clients are short and feeling the pain as prices have shot 11% higher in the last three sessions. Stay short for now but if prices do not roll over soon we will be forced to cut losses. Coffee gave up 2.4% today making it a near 10% loss in the last four days. We should see a trade below the 200 day MA for the fits time in twelve months. That level in July is $239. Corn and soybeans were unchanged while wheat gave up nearly 2%. All grains are oversold and could be bought with the intention of adding to the trade at higher levels. At the moment some clients are long CBOT wheat from higher levels looking for a trade back near $8/bushel in the September contract. Treasuries look toppish but that has been the story for several weeks. Clients are short and carrying losses in 30-yr bonds and Euro-dollars.

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 market traded a $31.60 range as the economic climate of the globe continues to fuel the resiliency of gold as traders and investors alike continue to monitor the fragility of the European Union, Libya and the Middle-east, China, and the Unemployment and housing sector here in the U.S. Obviously the European Union has many investors seeking "safe haven' alternative investing as the debit crisis in the region has savvier investors choosing gold as their currency of choice. The EU finance ministers have apparently drawn a line in the sand regarding Greece as they are demanding tougher austerity measures before releasing bail-out cash to the nation of Greece. This situation remains critical and has certainly revealed conflicting reports all week.

Many Gold bugs continue to expect further rate hikes from China's "Peoples Bank of China as the historically high inflation has been a drag to the Chinese economy.

The following are highlights from this week's Gold reports:

Wednesday it was reported that Greece's Prime Minister George Papandreou was set to resign. Today he is committed to establish a new government and stated he would not resign. His Government has been scrutinized and criticized over Greece's austerity measures which is the requirement to meet the conditions laid out by both the European Union and the (IMF) International Monetary Fund as part of their 110 Billion Euro bail-out.

Thursday:

Prime Minister George Papandreou newsworthy quotes:

"The challenge before us, the moment we are facing. Is historic. Either Europe will make history or history will wipe the European Union." "It is time to fight for Greece" he also stated that the latest Rating cuts to CCC from B "makes Greece the most risky nation In the world"......and calls for "Unity for Greece".

Obviously this crisis bears watching !!!!

The U.S department of labor announced the Initial Jobless claims to be 414,000...this was 6,000 better than predicted by analysts.

Monday:

Monday S&P downgraded Greece's credit rating from "B" to "CCC" while stating the outlook looked "NEGATIVE".

Commentary:

Despite a huge drop in Crude Oil as the July futures contract traded as low as $91.84per barrel this week Gold continues to remain resilient as investors are still using it as a safe haven investment.

Today's trade was very choppy as it appeared that traders were liquidating position as the momentum changed from upside to downside several times during the session. This indicates to me the total feeling of uncertainty amongst the trading community. Clearly traders are waiting for clear indicators prior to making their trading strategies ....Stay tuned !

MY SWING NUMBERS FOR MONDAY 6/20

AUGUST GOLD

RESISTANCE # 2.................$1555.00
RESISTANCE # 1.................$1547.00
PIVOT.................................$1535.00
SUPPORT # 1.....................$1535.00
SUPPORT # 2.....................$1515.00

JULY SILVER

RESISTANCE # 2.................$36.52
RESISTANCE # 1.................$36.14
PIVOT.................................$35.53
SUPPORT # 1.....................$35.14
SUPPORT # 2.....................$34.54

Mike Daly
Gold specialist / Gold Specialist
PFG BEST

mdaly@pfgbest.com

312-563-8029
877-294-4669

There is a 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. PFGBEST, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. 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.

Crude held yesterday's low finishing marginally higher today. This is a first sign that the downside movement may be drawing to a close. We are not advocating fresh long entries yet but we're getting close...stay tuned. As for the distillates hedgers should have light long protection on in fall heating oil and RBOB contracts. Natural gas gave up another 3% today failing to hold the $4.50 level closing below the 40 day MA for the first time in three weeks. Apparently we left our clients shorts too early and at this moment we're not prepared to catch this falling knife. We will look for long entries from lower levels...stay tuned.

Equities were able to trade slightly higher today but we still think a coin toss on which direction from here so we have no long/short suggestions or bias. The US dollar failed to hold onto its gains today closing near its lows on the session. The next few days' action will be critical but could the 4% appreciation the last week be all she wrote? We see no new trade ideas as the safest place in this sector is likely the sidelines. Lean hogs were lower for the first time in eight trading days. This has been a nice ride for longs and being this move has carried prices to overbought levels we suggest booking profits on longs. Live cattle were higher by their daily trading limit today closing at their highest level in one month.

Both gold and silver closed slightly higher today. The charts are looking friendlier and we really like how the metals held in considering the action in outside markets the last two days. This weakness being shrugged off by both metals is telling me that on just a little bullish news we should start another leg higher in gold and silver. If we see a new high for the week tomorrow in gold expect a challenge of the record high in gold and a run to $40/ounce in silver in the coming weeks.

Cocoa lost 3% today and sugar reversed to close 3.25% higher. We stand our ground bullish cocoa and bearish sugar but today was not the best day for clients in those trades. Cotton and coffee remain on our sell list losing 4% and 2% respectively today. Unfortunately we need to work out of clients cocoa and sugar positions as we do not like having too much exposure in any one sector at a time. Grains got drilled again today with corn down 3%, soybeans just over 1% and wheat nearly 5%. Take your outright shorts off but we will stay in the corn/wheat spread for clients...see previous posts. My suggestion is to exit bearish trades in Treasuries as I'm like you tired of looking at this losing trade on my blotter and we could see continued upside.

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 healthy move by China overnight should aid in further appreciation in most commodities in the medium and long term...in my opinion. Higher low and higher high in Crude likely helped by outside markets and the move in China overnight. On a settlement over $100/ barrel look for upside momentum to build...we are cautiously bullish with a target of $103/104 in July. Natural gas is just over 40 cents off its high last week having competed a 38.2% Fibonacci retracement. Our short term target in July remains $4.40/4.45 where we will likely start scaling into longer dated bullish positions for clients. News from China contributed to a rally in stocks globally with all major US indices appreciating by 1-2%. View this as a tradable bounce that could lift prices 3.5-5% higher...trade accordingly.

Our long target in the S&P would be the 50 day MA at 1323. Continue to fade rallies in the Swissie and buy dips in the Loonie. The Canadian dollar should see 1.04 and the Franc should see 1.1600 in their respective legs. Live cattle closed above the 20 day MA again today...stay long using that as your pivot point. Trail stops in lean hogs being we broke above the triple top mentioned yesterday. In the last six days lean hogs have appreciated just over 9%...do not be a pig book partial profits. Inside day in gold with a close back above the 20 day MA gaining 0.70%. Clients were advised to lift their July puts off in early dealings at a very slight profit when yesterdays low held. A nice move in silver today with July futures higher by 2.4% but we will need to re-take the trend line at $36.75 to feel confident we're moving north from here. On that in the next few sessions we will be shopping bullish exposure with aggressive clients. Copper traded higher by 3% breaking out on strong economic data and news from China. July above $4.20/ounce should signal further appreciation...trade accordingly.

Cocoa has held the 20 day MA now for three straight sessions closing higher by 0.90% today. We suggest bullish exposure and have an upside target of 3100/3150 in September. Aggressive traders can get short October sugar via futures or options with a first target of 23 cents. I've been called crazy for getting short grains of late and yes guilty as charged. Look for more depreciation and for corn and soybeans to be bigger losers than wheat. Our current recommendations are outright shorts in corn or short corn against long CBOT wheat 1:1. Say it is not so a break Treasuries in both the long end and short end of the curve. Some clients have bearish plays in 10-yr notes, 30-yr bonds and Euro-dollars anticipating more downward pressure...trade accordingly.

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

Commodity traders should pay attention to any extremes in weather, too much or too little precipitation, too much or to little heat...any extreme. Crude is approaching three week lows down nearly 2.50% today as of this post. In the last five weeks Crude has been a buy at these levels but past performance is not indicative of future results. If July futures breach $96 on a closing basis next stop should be around $93/barrel. We advised clients to lighten up on longs and move to sidelines if profitable on Crude and/or the distillates. We will be looking for signs of an interim bottom and long entries...stay tuned. If Crude breaks down expect a 10-15 cent break in both heating oil and RBOB...trade accordingly.

Bearish engulfing candle in natural gas today with prices down 2.50%. A 50% Fibonacci retracement put the July contract at $4.45; our target. Indices will finish higher today for only the second day in the last nine trading days. On the daily chart prices appear overstretched and the bearish bias seems to be at an extreme so as a gamble traders could look to buy on weakness with tight stops. Our clients have no exposure at the moment. The dollar failed to get above the 20 day MA again today losing 0.38%. In currencies on our radar is selling rallies in the Swissie and buying dips in the Loonie.

A potential triple tip may have been made in lean hogs, tighten up stops on longs and if we fail to make a new high in the next few days book profits on longs if not already stopped out. Aggressive traders are advised to re-establish bullish positioning in live cattle. Traders could be in either August or December contracts. Minor chart damage in gold today with a close below the 20 day MA for the first time in nearly three weeks. We have a short term target of $1475/1485 in August. Aggressive traders bought July $1500 puts today with only two weeks time so be quick to take a profit or cut losses. Silver lost 4.25% today closing below the trend line that has held for nearly five months. The chart is ugly and we cannot rule out a quick trade to $33/ounce. We had previously advised buying under $35/ounce but think it was bad advice...we recommend the sidelines at the moment.

Cocoa remains on our buy list as we feel the recent action is a consolidation before another leg higher resumes...trade accordingly. Sugar is a sell as aggressive clients started scaling into October put options today. A retracement from overbought levels should drag prices 7-10% lower in the coming weeks. We are anticipating more weakness in grain complex in the immediate future positioning clients for a deeper trade lower in corn and soybeans and a marginal decrease in wheat. That being said aggressive traders could be short corn or short corn against a long in CBOT wheat 1:1. Treasury traders should have rolled to September contracts and be willing to cut their losses on new highs or add to their shorts on a confirmation of the much anticipated sell off. Currently some clients who are short via options are down on the trade in both 10-yr notes and 30-yr bonds.

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

Investors are seeking quality, but with talk of defaults and debt ceilings, Treasuries just aren't the stellar attraction of "fear money" they once were. At the trough of equity trade in Friday' session, the long bond was treading water near 126, which was a gain of less than a handle on the day. Although 25 ticks is respectable, it could have easily been twice that in a more panic stricken environment or one in which investors put more value into the premise of "return of capital" rather than "return on capital". In other words, the mentality of investors in 2011 is far calmer than that of 2010. Only time will tell if panic will begin to set in, or if cool heads will continue to guide trade.

It has been a dreadfully slow news week, and today was no exception. Unfortunately, next week won't be much better; aside from retail sales and PPI the market will be left to sulk over last weeks disastrous data. With this in mind, as well as the tendency for Treasuries to "go out with a bang" we have to lean toward at least one more new high before a reversal (yes, yesterday's trade fooled us a bit).

Seasonality in Treasuries suggests some near-term softness could be followed by a mid to late summer rally...and yes, this can happen regardless of fundamentals, debt ceilings or even Treasury credit downgrades. It is often the less obvious market forces that guide trade, while the masses focus on the obvious (remember, most people lose trading on leverage).

That said, we'd rather be bears than bulls for the time being. Ideally, we would be most comfortable looking lower from what we see as significant resistance levels of 127ish and 124'10 in the September bond and note, respectively. In the meantime, look for support in bond futures near 124'13 and in the note near 122'26.* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.

Treasury Bond and Note Option and Futures Trading Recommendations
**There is unlimited risk in naked option selling.

June 1 - Clients were recommended to sell July bond 128 calls for about 30 ticks.

June 6 - Clients were advised to offset short bond calls at 15 ticks, or a profit of $235 to $300 per contract before transaction costs.

In other markets....

June 2 - Clients were recommended to sell the July Euro 150 calls for about 36 ticks.

June 7 - Clients were advised to add to their short Euro call position by selling the 151 call for 37 ticks.

June 9 - Clients were advised to offset the July 151 Euro call near 17 to lock in a profit of about $250 before commissions and fees.

June 10 - Clients were advised to buy back the July Euro 150 call for about 14 ticks to lock in a profit of $275 per contract assuming an entry of 3

(Our clients receive short option trading ideas in other markets such as gold, crude oil, corn, soybeans, Euro, Yen, and more. Email us for more information)

Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading

cgarner@DeCarleyTrading.com

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Local : 702-947-0701

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

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.

This week's activity has been far from one sided as markets are fluctuating in both directions with no clear direction. Weakness in equities, a rising dollar, a slowdown in China or a production increase in Saudi Arabia take your pick but Crude was down almost 2.7% today. We used today's set back as a buying opportunity for some clients opting to buy September bull call spreads. We would prefer to see more signs of a bottom before committing to a position trade in futures with clients. Natural gas recouped some of the previous days loses picking up 1.8% today closing at the 9 day MA $4.75 in July. We are anticipating a trade down to $4.40/4.45 in the coming weeks...trade accordingly.

After one day of gains losses resumed in equities which are near their lows as of this post. Momentum remains down as we will not try to pick a bottom as prices MAY challenge the 200 day MA's; in the Dow at 11575 and in the S&P 1245. As forecast the dollar is trading up to the 20 day MA, the test next week will be if we can trade above that pivot point. We favor fading rallies in the Euro, Pound and Swissie. The Aussie and Kiwi appear to be coming under pressure as well. Live cattle failed to hold onto their gains and end the week where they started the week. If we hold last weeks lows we will re-establish longs for clients...stay tuned.

Traders can continue to buy dips in lean hogs as we expect an additional 2-3% appreciation. Gold could be making an interim top much of that will depend on out side markets next week. We see solid support at the 40 day MA at $1517 but if that was to give way we could see $1475/1485 relativity shortly thereafter. Bearish engulfing candle in silver today with prices closing at the 20 day MA: in July at $36.20. We are looking for lower prices in the immediate future so get short or look for a long entry from lower levels. Buy with both hands if given the opportunity between $34/35 ounce.

Cocoa is 5% off its lows this week but we think there could be an additional 5-10% appreciation...trade accordingly. Corn prices are approaching record highs and though we do expect prices to remain elevated we are positioned to play set back with clients as we think prices have gotten ahead of themselves. We would play new crop as if we are wrong traders should ration old crop prices. As for wheat we're long with clients looking for a rebound and we are neutral in soybeans at the moment. We're still looking for a trade lower in Treasuries but as opposed to fresh entries just as a window to exit existing shorts likely at a loss...stay tuned.

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

July corn futures at the Chicago Board of Trade on Thursday morning hit a new all-time record high of $7.93 a bushel, surpassing the previous high of $7.88 3/4, scored on April 11. Prices did then back off the daily high and were trading near mid-range as of this writing. July futures prices have tacked on around 50 cents a bushel from this week's low of $7.29 1/4. Corn market bulls have gained fresh upside near-term technical momentum this week and are now looking for more on upside in near term.

The next upside price objective for the powerful corn market bulls is producing a close above major psychological resistance at $8.00 a bushel. Such would provide the bulls with additional power to suggest a fresh leg up in prices in the near term. If the Corn Belt weather patterns work in the corn bulls' favor during the critical corn pollination period that occurs in late-June/early-July, (meaning hot, dry and windy weather conditions such as those experienced in the Corn Belt earlier this week) then upside price potential in the corn futures market would be greatly enhanced.

Given the already extremely bullish and very tight supply and demand balance sheet for corn at present, any significant weather problems in the U.S. Corn Belt this summer would likely produce explosive upside price action. The corn market bulls would see their enthusiasm significantly dented if July futures prices dropped back and closed below strong chart support at this week's low of $7.29 1/4. Such would also be an early technical clue that market has put in a major price top. Near-term technical resistance for July corn futures is now located at the April high of $7.88 3/4, at Thursday's all-time high of $7.93 and then at $8.00. Support is seen at $7.70, at Thursday's low of $7.59 1/2, at $7.55 and then at $7.50. Stay tuned! Jim Wyckoff

No action by OPEC today reverses Crude and from here we should see higher pricing. July futures settled back over the 9 day MA and we should be on way to the 40 day MA at $104.50. The only dynamic that could slow appreciation is if we see a dramatic pop in the US dollar which at this juncture does not look likely. WE would be a buyer of dips in Crude and the distillates for speculators. Extreme hot weather has not allowed natural gas to correct as forecast but we continue to see significant resistance just above the recent highs. Aggressive traders should be positioned to play a 30 cent break and then look to reverse and get long in fall or winter contracts. Day six of a correction in indices as prices are approaching four month lows. We will be looking for signs to get long but would like to see some sort of evidence before initiating positions. At this point we still cannot rule out a probe to the March lows approximately 2.9% from current levels.

The dollar should experience a dead cat bounce from here but as we've said in previous posts not more than 1.5-2.0%. Exit all longs in European crosses and look to re enter from lower levels. Some clients are long the Loonie and some also got short the Swissie today. A possible trade could be to initiate that spread 1:1 in futures as well. July lean hogs picked up nearly 3% today and are 6% off their lows from two days ago. An interim low is likely in place and clients should be in bullish plays as prices are back above the 20 day MA for the first time in two months. Live cattle are a buy and appear to be breaking out from their recent base. On confirmation which we should get in the coming sessions...add to longs. Gold and silver were marginally lower with gold down $6 and silver 15 cents as of this post. Our bearish bias still exists in gold while we play both the long and short side with clients that trade silver. We're expecting gold to find its way back under $1520 and silver to trade under $36 in the coming sessions. Echoing yesterday's trade above the 9 day at $37.15 or below the 20 day MA $36.05 should signal where from here.

Cocoa remain on our buy list and we still expect a correction in sugar but wait for signs of a reversal as we've already advised probing shorts and to date it has been a losing proposition. A near 25% appreciation in the last five weeks in our mind is not justified. Ag was higher ahead of tomorrow's USDA report but we think the bullish news is priced in and unless we get a bullish surprise we would look for a trade lower. Some clients are short corn and long wheat into tomorrow's number. Talk about a trend...the move higher in Treasuries has been relentless and we're about to exit shorts at a loss which likely means we're close to rolling over...stay tuned. For now clients are holding losers.

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

Clearly the Fed has no clue and if this is a market with NO inflation I'd hate to see a commodity market with inflation. Crude fights back in late dealings to close marginally positive in today' sessions. My opinion is this price action was position squaring and light buying ahead of Bernanke's speech today and OPEC is on the docket tomorrow. Furthermore the strength in the distillates could have aided in Crude's action as well. We will likely be looking for long exposure in Crude in the coming sessions and have advised hedgers to have some exposure on their fall contracts. Inside day in natural gas as we are still looking for a price reduction in the coming weeks. We've advised bearish plays expecting a 5-8% break. Stocks fail to hold onto their gains and will settle near their lows as this correction does not appear to be done. Though we feel there is more risk to a price reversal and we see limited downside...trade accordingly.

The dollar posted a four week low but being were oversold we do not see much more downside and instead see a sideways consolidation around these levels. The Pound, Swissie and Euro remain in bull mode but we would trail stops or lighten up as we've seen a sizable acceleration of late. Aggressive clients were advised to scale back into longs in the Loonie; our suggested plays are purchasing call options or getting long futures and selling out of the money calls 1:1. Live cattle were higher by 1% while lean hogs positive by 2% in today's session. We have advised bullish plays in both meats thinking we can see both hogs and cattle appreciate from current levels. To take it a step further live cattle should be bought with both hands for those capitalized investors willing to stay with the trade for several months as just a 50% Fibonacci retracement would be approximately $4,000 per futures contract.

Flip a coin in gold...we cannot get a pulse and feel better on the sidelines with a slightly bearish bias. We continue to trade both sides of the silver market with prices sideways again today. A settlement above the 9 day MA at $37.25 or below the 20 day MA at $36.15 should signal the direction of the next leg. Sugar broke out to higher levels today...shorts should have cut losses. We see a triple bottom in cocoa around 2850 and think we could get a bounce from here. We're suggesting bullish plays in September via futures and options. Cotton was down the daily limit again today...fade rallies. Once we exit out clients out of cocoa we should have some bearish plays likely after Thursday's USDA...stay tuned. Corn and soybeans pared yesterday's losses but we still think further price reduction is coming...trade accordingly. Wheat cost just over 1% so clients wheat/corn spreads were hit from both sides today. Stay the course for now but this trade could get ugly as we're down approximately $1,250 per. Bernanke's ramblings help add a bid to the Treasury complex today...on new highs cut losses as fighting the Fed will cost our clients money. I just thought these morons were smarter than that...in my opinion this is a bubble but the timing of when it will burst and from what level is beyond me?

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

ICE Futures U.S. cotton for July delivery on Friday hit a fresh five-week high of $1.6849 a pound and then backed off sharply on some profit-taking pressure from recent gains. There is solid follow-through selling pressure on Monday morning, but no serious near-term chart damage has been inflicted as intra-day trading action remains volatile. July cotton futures are still in a three-week-old price uptrend on the daily bar chart, from the May low of $1.4206. While the bulls still have a near-term price uptrend in their favor, they will need to show fresh power very soon to keep the uptrend alive.

The next upside technical objective for the cotton market bulls is to produce a close above strong chart resistance at $1.7500. The contract and all-time high in ICE cotton futures occurred in March, at $2.0997, basis the July contract. The cotton market bears would begin to gain some fresh downside technical momentum by producing a close below strong chart support at $1.5000. Such would then open the door to a challenge of technical support at the May low of $1.4206. Near-term technical resistance for July cotton is seen at $1.6000 and then at Monday's high of $1.6356. Strong chart resistance is also seen at last week's high of $1.6849. First support is seen at $1.5500, at $1.5250 and then at $1.5000. Stay tuned!--Jim Wyckoff

All the traders that sold in May...are they back already as buyers? Crude oil fell back today but did manage to remain above the 9 day MA; in July at $100.35. We remain mildly bullish but we are smack dab in the middle of the recent trading range so trading either direction is not risk-less at these levels. We would prefer buying a dip or adding to longs on a trade above $102 which would likely confirm more upside. Natural gas surged nearly 4% higher today on the AGA report lifting prices to five month highs. We've advised clients to fade this rally. Those in August bear put spreads could start buying their bottom legs back which we started to do today for some clients.

The 100 day MA held in the indices in early March, last week and again in the last two sessions. It will all be on the NFP number tomorrow to see if we can continue to hold this line. An ugly number should already be factored in so unless there is a number less than 50,000 or a large jump in unemployment we do not expect much more additional selling at this time. The 100 day MA comes in at 1312 in the S&P and 12170 in the Dow. The dollar continued to slide today closing down now six out of the last eight sessions. We continue to like buying dips in the European crosses; Euro, Swissie and Pound. We advised clients to gain bullish exposure in the Loonie today. We expect today's lows to hold as this level has supported recent tests. Our favored play is getting long futures and selling out of the money calls 1:1.

Livestock both hogs and cattle appear to be basing out but we feel there are far better opportunities elsewhere so do not force trades until we get a confirmation of a bottom...only my suggestion. August gold traded below the 9 day MA but managed a close above that level which for now serves as the pivot point at $1528. We anticipate a gradual slide and would be willing to be a buyer from lower levels with aggressive traders. As of this post silver is down 6% in the last two days but a close above $36/ounce was a small victory for the bulls today. We will likely be gaining bullish exposure on setbacks but at this juncture a trade closer to $34/ounce cannot be ruled out. Although an extremely risky play we like selling July puts under the market on massive down days.

Sugar gained nearly 5% today carrying prices to five week highs...we would start looking for an exit door on longs. Cocoa got hit 2% today so longs have taken heat in the recent session but we still prefer bullish exposure and have advised clients to stay the course for now. Grains were higher by 1-2.5% today with corn making new contract highs in new crop and soybeans likely on their way to new highs. We have advised clients to wait for a dip but with the weather being built in and tight stocks globally we may be buying at higher levels...so stay tuned. We are down on all bearish plays in the Treasury complex with clients and just when we are ready to cut losses we get a glimmer of hope today with the reversal. Stay tuned...if this is the top clients should get their money back if not we will likely be cutting loses on put options in 10-yr notes and 30-yr bonds in the coming sessions.

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