With a more positive outlook domestically and abroad expect commodities that had previously factored in a more dire picture to get back losses from late 2011. Today makes it five days in row with Crude down just over 1% as of this post trading at six week lows. A close below $98.30 in March should signal lower ground. $99 should cap further upside and I could see prices drifting back under $94 in the coming weeks. Both RBOB and heating oil are having trouble keeping their heads above water as well. If Crude turns south as I expect do not rule out a 15 cent correction on the distillates. To clarify if there is confusion when natural gas broke the 9 day MA we advised moving back to the sidelines to exit long exposure. Depending on your order entry would dictate if this was a slight profit or a slight loss. There is no doubt longs over the last few months on the whole have been a losing proposition...the good news is our clients and hopefully followers trade more than one market and can use my advice to offset their natural gas losses in other commodities.

Stocks are having trouble breaking the 20 day AM on the downside as that level has supported for the last three sessions. In fact after the 1% plus surge today domestically prices are back above the 9 day MA. My suggestion is wait for the NFP number this week to get re-positioned long or short. My gut tells me that if by week's end we do not see new high expect a 4-6% correction in the coming weeks. Gold finally reached our target trading above $1750/ounce for the first time since early December. Past performance in not indicative of future results but the last time gold was around these levels we experienced a rather nasty $200 sell off so although bulls remain in the driver's seat have an exit strategy in place. I ultimately see $1850-1900/ounce in the coming months but I expect a correction first...trade accordingly. Silver continues to but its head against the $35 level but we need to see that level penetrated very soon or a correction will likely commence. A trade above $34 would lift prices to the next resistance at $35.50 while a correction south would take silver back near $30.50-31.

I still think the 79.00 level holds in the dollar index and we experience a dead cat bounce from here. The Euro could be sold with tight stops but I would hold off trying to pick tops in other crosses as they continue to inch higher. Traders of late should have been stopped at a small loss trying to scale into shorts based on my trade recommendations. Cocoa and sugar broke their 50 day MA's today and it appears cotton will by week's end. I continue to advise fading rallies in these three soft commodities. OJ lost 5% today and should be headed back under $2/lb in the coming sessions. I am expecting a violent 10% correction...trade accordingly. Treasuries had their first negative day in six sessions. Likely fast money taking some risk off ahead of Friday's NFP. Corn and soybeans have tread water for the last month getting back their December losses in January but the standout of late has been wheat. Gaining 1.25% today and advancing to eleven week highs. I see the next resistance on the March contract between $7.15-7.25. The 20 day MA in lean hogs are acting as a magnet for prices. I suggest buying a dip and have no client positions currently. April live cattle were higher by 1.75% today trading to seven week highs. I remain bullish and believe this leg can carry prices to contract highs in the coming weeks...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.

Nothing included markets move in a straight line...stocks will not move higher in a straight line nor will natural gas move lower...all things must come to an end. I am still in a holding pattern waiting for direction in Crude oil. We're still experiencing a tug of war in the distillates as RBOB was lower today and heating oil was higher...the reverse of previous sessions. Natural gas was lower by 7% today making it 21% already in 2012..a rocky start! The reality is I still do not see signs of a bottom. Equities continued their climb with the S&P exceeding our target of 1300 and the Dow within 100 points of our target...see previous posts. The 9 day MA should continue to support and as long as prices hold above that level I remain friendly.

Gold is having trouble getting above the 38.2% Fibonacci retracement level at $1663 in February. I still see $1676; the 50 day MA but much more than that is not likely in my opinion on this leg...trade accordingly. Silver bulls are running on fumes as well...I am not advocating a bearish trade yet but start looking for an exit door on longs. The dollar index broke the 31 day EMA, a level that has supported since mid-November...could the tides be shifting? The Euro and Swiss franc are above the 20 day MA and the Pound is on the verge of penetrating that level...all starting to look more friendly. From where I stand the commodity currencies look the weakest along with the Yen and European currencies appear to be a buy. Trade small as the forex market has been manic of late.

Cocoa is back above the 50 day MA...aggressive traders can work back into longs with stops below the recent lows. Sugar #11 could be bought with stops below the 50 day MA as well. Treasuries appear to be rolling over but my clients have been fooled too many times so we will remain on the sidelines...forced into the market I would be a seller. Grains were higher by 1-2.25% today though I remain on the sidelines still to see if we get a test of the December lows. Next week if we have not I may be a buyer of wheat and or corn for clients...stay tuned. Live cattle and lean hogs remain a long proposition until prices breach the 20 day MA on the downside.

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

Today is only the second full day of trading as markets are still trying to find direction. I maintain a weighting in commodities is necessary for all suitable investors that desire diversification...just saying. Albeit slight gains Crude made it to higher ground and appears like we will see further upside from here. My suggestion exit any remaining bearish trade. Natural gas was higher by almost 4% today lifting prices as of this post above the 9 day MA for the first time on a closing basis in five weeks. If February can muster a further advance above $3.25 this week the bottom may be in...stay tuned. Some clients maintain small bullish positions three months out and will add on further proof of a bottom. European equity markets continued higher while domestic markets failed to follow through flat in today's session. The tone in January generally is what guides performance throughout the year so I am keen to see the coming weeks action. From where I sit I sense higher ground but clients have no exposure in the indices.

Gold gained for the third consecutive day adding nearly .80% today. We seen another $60-70/ounce before serious resistance. Silver appears to be taking a breath after the 13% surge in the previous three sessions. Once we trade above $30.25 we see $32 followed by $33...likely in the coming weeks. Head fake as the dollar index is back above the 20 day MA. The 32 day EMA supported as it has for two months. Expect a range bound market between 79.00-81.00 in March. The biggest loser today was the Swiss which cannot get out of its own way falling 1.05% today. Bearish trades should continue to work here...trade accordingly.

A freeze scare in Florida; the largest OJ producer sends OJ prices to a one year high. This spike should be short lived in my opinion and aggressive traders could sell after a further ascent. 30-yr bonds are back under the 20 day MA while 10-yr notes closed at that pivot point. Forced into the market we would be selling rallies but we currently have no exposure with clients. All those that caught the recent leg higher in grains great trade but my suggestion is book profits and move to the sidelines. That goes for corn, wheat and soybeans. Live cattle appears to be finding support at the 20 day MA though I would still expect a probe lower...trade accordingly. February lean hogs must maintain 83.50 for me to remain friendly. A trade over 86.75 and I would suggest adding to the trade.

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

What will a dollar retracement mean to the commodities market? Crude will close higher but roughly $4 from its highs. Being we did not see more upside today considering outside markets we would continue to fade rallies looking for lower ground. On a breach of $95/barrel we would be adding to open shorts expecting to capitalize on a play to the high $80′s...trade accordingly. Natural gas is lower by 3% as of this post but as long as the recent lows hold we would use setbacks as buying opportunities. Our suggestion to clients is buying February and March on this retracement and adding once we get a close over the 18 day MA. Equities gapped higher today gaining 3-5%. We do not expect much more than bounce seeing the S&P trading above 1210 and the Dow above 11700 in our opinion is not likely unless the circumstances change. We still see weakness globally and view today's action just as a relief rally...trade accordingly.

Gold is higher by 1.6% closing at the 100 day MA. On a settlement above $1730 in December $1800 comes in play but until we see that we are still in the bear camp. Silver gained just better than 3.3% but the 40 day MA is still capping any additional upside. We see $33 as a ceiling in December and still view a break of $31/ounce as a sell signal thinking $29/ounce comes into play in early December if not sooner. The US dollar traded lower for the first time in four sessions as the 80.00 level capped rallies two months ago and appears to once again. Other crosses appear to be oversold so aggressive traders can probe longs with stops below the recent lows. The one exception is the Yen which we still favor bearish exposure looking for the depreciation to continue. Traders holding bearish December plays should be looking for an exit door closer to 1.2650. After eight days of attempting to get above the 20 day MA coffee has failed the task and appears to be starting its next leg lower...trade accordingly.

Cocoa hit a new low but we favor catching this falling knife with small size and then adding once we get moving north. We feel the last 30 day slide has over shot to the downside...trade accordingly. While 30-yr bonds and 10-yr notes appear to high the fact we did not see a bigger break on the rally in stocks leads me to believe that we should stay clear until this market moves accordingly. We continue to like bearish exposure in 2013 Euro-dollars. We should see a bounce in Ag from here...that goes across the gamut...corn, soybeans and wheat. At this point we are advising the sidelines thinking we would prefer selling a rally then buying this dip...stay tuned. Wait for a further break to be buyer of live cattle. Aggressive traders can be positioned short lean hogs with stops above the recent highs. A 61.8% Fibonacci retracement should target 88.60 in February pigs.

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

Most commodities and stocks have traded lower in recent sessions and we feel there is more to come...trade accordingly. From here we see support at the 18 day MA at $96.20 with resistance at the 9 day MA at $98.50 in January. We are advising selling rallies with a first target of $92 followed $89. Assuming our assessment is correct we should see an additional 10-15 cents of downside in RBOB and heating oil. Natural gas appears to be finding support around these levels the last four sessions. Aggressive traders can again start probing longs with stops below the recent lows. Equities are back under their 50 day MA for the first time since early October. The bears are getting back into the driver's seat as it looks like we should see further downside. The 50 day MA's should act as the pivot point; in the Dow at 11470 and just above 1200 in the S&P.

Gold broke the 100 day MA today and is lower by 2.4% today as of this post. Gold has lost just over $125/ounce in the last two weeks. From here we think you could see an additional $50/ounce...trade accordingly. Silver is off 2.4% as well as prices approach $30/ounce. Although we've traded below $31/ounce we have yet to close below that level. A settlement below that threshold we should see $29/ounce in December futures. As commodities continue to trade lower expect the commodity currencies to continue south. In terms of the charts we still favor the risk/reward bearish positioning in the Pound and Yen. In the last three weeks cocoa has lost 14% and in our opinion traded to levels that longs should be back on your radar. Once we see the greenback stop appreciating we would suggest adding to the trade. My initial suggestion is scale into March willing to take a little heat.

Continue to play the short end of the curve with 2013 Euro-dollars. We feel traders can have bearish exposure and remain short as long as new contract highs are not seen stay the course. Grains continued lower with corn down nine out of the last ten sessions closing today at six week lows back under $6/bushel. On a further commodity meltdown do not rule out $5.50. January soybeans lost 1.7% trading to their lowest levels in 2011. We see further downside and would not rule out prices filling a gap in the chart from October 2010...trade accordingly. Wheat was lower by just over 1% but we feel most of the damage has been done here so though we are not bullish we would start looking for an exit door on bearish trades. We would like to see if in the next few days we can fill the gap from late September in February live cattle before issuing bullish trade to clients. We got very close today but hold off for the next few sessions...stay tuned. Lean hogs remain in bull mode gaining once again today.

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

Maybe it is the money some clients have lost on their longs or maybe I'm getting a better feel for the market but I expect prices to head south in a number of commodities...trade accordingly. Crude will close virtually unchanged today but the volatility continues as $2,500-4,000 daily ranges are becoming more and more common. We expect prices to trade lower and continue to operate under the influence that Crude is a sale above $88/barrel and a buy below $78. In December futures 3.75-3.80 continues to support natural gas but wait for a move higher to confirm that an interim bottom is in. Stocks were surprisingly resilient today holding onto slight gains as of this post. We are incapable of picking a top but a close back below the 9 day MA would signal that we are due for at least a pullback.

That pivot point comes in at 1205 in the S&P and 11425 in the Dow. Another flush lower in gold with prices down $25/ounce trading to two week lows. We advised clients to cut losses on their gold longs today. Silver gave up nearly 2.5% today briefly trading back under $30/ounce. Clients were advised to cut loses on their silver longs today as well. The fact that copper lost 5% today and is off 10% this week does not bode well for commodities moving higher in the immediate future. The dollar was unable to hold onto gains reversing mid-day closing under the 34 day MA again. Clients continue to scale into bearish exposure in the Yen anticipating a trade down to 1.2750 in the coming weeks.

Cocoa cannot get out of its own way on a rally in the coming sessions move back to the sidelines. Exit all remaining futures longs in November OJ. Tomorrow is options expiration and we expect a trade below $1.70 in futures. Use downside into the weekend tomorrow to exit 30-yr bond bearish trades. Corn reversed to our surprise and is on the verge of breaking above the 200 day MA...a feat that we had expedited but we anticipated a trade lower first. A close over $6.60 in March triggers buy signals. January soybeans closed lower again today but were able to pare loses almost fighting back into positive territory. Live cattle were lower again today making their way back to the 20 day MA. We may get a window to offset December shorts for clients on a further break. As for February a 50% Fibonacci retracement drags prices back near 122.50...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.

At least in Vegas you get free drinks and maybe some comps...this market is a kin to gambling so be cautious. A $7 trading range in Crude oil today takes prices dangerously close to $75/barrel a level not seen in fifteen months. We still say we see $95 before $75 but we may end up with egg on our face as September futures got within 71 cents overnight. Aggressive clients have been buying this correction and it has been tough having any bullish conviction but keeping your position size small should prevent sleepless nights. Natural gas remains a screaming buy as we should see a 7-10% appreciation from current levels. Our suggestion remains long exposure in October via options and futures. A 100 point range in the S&P and 800 point range in the Dow...they say timing is everything. A bullish engulfing candle and key reversal on good volume should signal the start of the bounce were looking for in the indices. We expect 11700/11800 in the Dow and 1235/1245 in the S&P in coming weeks.

Gold is exhibiting signs of a top closing well off its highs in recent sessions. We have left numerous dollars on the table not be long with clients but we refuse to be long when the correction happens as they always do. Most clients are on the sidelines here but do not rule out a $100-150 correction any day now...trade accordingly. Silver trades lower again today trading below the 50 day MA for the first time in four weeks. We feel there could be further downside but have advised clients to book profits on their shorts and look to be a buyer near $35/ounce if given the opportunity.

The forex market is insane and unless you will be glued to a screen look elsewhere. We have advised clients to be long the Loonie and also used the 8% advance in the Swissie to get short today via bear put spreads. Do we think the run is over who knows? We're just expecting a retracement as prices have advanced 20% in the last month with very little correction. In the softs sector lumber remains on our radar as a buyer...nothing else jumps out at me...stay tuned. A major short squeeze took place in Treasuries but still no signs of a top. Our clients Euro-dollar shorts are getting hit be we will stay the course for now. Corn and wheat finished higher today while soybeans finished lower...wouldn't you know we're long soybeans with some clients and on the sidelines in the others. We still like the trade and have exposure in November with a target of $13.60.

Clients were advised to book profits on their Lena hogs shorts and move to the sidelines in this entire complex; that means cattle and pigs.

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

It is evident by the market fluctuations that investors are not excited about the current economic conditions. This in my opinion is just and as far as I see these wild swings are not going to end in the immediate future so tread lightly. Oil is down nearly 9% in the last seven days but as we said yesterday as we approach the levels we bounced off in June we see value here. We've advised clients to lightly scale into October contracts thinking we have sold off too aggressively of late. It is apparent that the downward pressure in the products (RBOB and heating oil ) are spilling over into Crude oil. We could see another 10 cent decline in the products which would likely equate to a $2 drop in Crude...trade accordingly. Natural gas dropped 1.5% today dragging prices near six month lows. We like getting long October via futures and or options depending on your risk tolerance.

A near 30 point trading range in the S&P and 200 in the Dow is not settling for traders but the reality is in our opinion the panic will subside and we bounce from here. Remember it is always darkest before dawn and this recent route has been one of the ugliest in years. Traders in the S&P should have an upside target of 1305/1310. Gold hits another record high nearing $1700/ounce but in recent days the upward momentum has been waning. Am I calling a top...no way as I've tried to play the correction and got walloped but it feels awfully crowed and ripe for a nasty correction. Silver gained 4% today and this reminds me of being short sugar two weeks ago...see previous posts.
This is not for the faint of heart and it may take deeper pockets to stay with my clients silver shorts than I had previously thought. At the moment we are staying the course willing to stay a bit longer before we admit we're wrong.

Oh by the way sugar has lost almost 13% in the last week for anyone that's not following. The Aussie remains a sale as long as the 20 day MA caps rallies. That pivot point today shifted from support to resistance FYI. Sugar gave up nearly 2% as our first target was obtained intra-day today. On a new low we should see a probe to 26 cents where would likely leave our shorts or at a minimum tighten stops and lighten the load. OJ may have started to roll over as prices were lower 1.5% today. We've suggested bearish exposure in November contracts. Grains traded slightly lower giving back some of yesterday's gains. We are wanting more downside to be a buyer at lower levels this week or next. Lean hogs were down big in early dealings but pared losses closing back above the 20 day MA. We have some clients short but are perplexed by the comeback. If we do not revisit today's lows in the next few sessions we may advise to wash the trade...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.

Based on the action in Treasuries, commodities and stocks today it may be more about not losing than making money. Crude oil gave up 1.50% today trading near a three week low. Prices appear to be rolling over and we see a trade below $94 into next week and a potential trade back near $90/barrel on a severe overreaction. As we said yesterday the closer natural gas futures get to $4 the bigger interest we have. Hold off for now but with September within 15 cents of that mark natural gas needs to be on your radar. Stocks as of this post are trading lower once again but our suggestion is to cash out on bearish trades and move to the sidelines.

Gold finished up $15 on the week with its highest close today but nearly $10 from its highs. To me this trade is way too crowed and at these levels we would rather be short. We recognize this is a controversial opinion but we have voiced a $50 correction and stand by that idea. Silver closed below the 9 day MA again today but have stayed range bound all week. $41 in September should continue to cap rallies as we anticipate a trade under $38/ounce in the coming weeks...trade accordingly.

Outside of the dollar the Loonie was the lone loser today giving up 0.50% trading to a two week low. On a breach of the 20 day MA on a closing basis we should see the selling intensify. A 50% Fibonacci retracement would drag prices 1 cent lower. Sugar traded lower this week for the first time in four weeks and only the second losing week in the last twelve weeks. In fact prices briefly traded below the 20 day MA for the first time since mid May. Some clients are short October and March expecting an additional 10-15% depreciation. A serious break out to the upside in the debt complex on both ends of the curve as this clearly served as the flight to quality in today's action. Clients took some heat in Euro-Dollars thankfully they only have a small position.

Corn was lower by 2.5%, soybeans 1% and wheat nearly 3%. Look for this to continue and we should be able to buy from significantly lower levels ahead of the August USDA. Live cattle goes out near its highs and should make a stab at the 20 day MA next week and perhaps an attempt at the early July highs...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.

August Comex gold futures on Monday hit another new all-time record high of $1,604.50 an ounce, as of this writing. Since scoring a fresh six-week low of $1,478.30 on July 1, gold futures prices have rallied by more than $120.00 an ounce. The main bullish fundamental inputs for safe-haven gold have been the ongoing European Union sovereign debt crisis, and most recently heightened concerns the U.S. debt problem is not going to be effectively dealt with by the U.S. government. From a technical perspective the gold market remains longer-term bullish and the bulls have recently regained fresh upside near-term technical momentum.

There are no early technical clues to suggest a market top is in place for gold, and at present the path of least resistance for prices remains sideways to higher until near-term technicals suggest otherwise. The fact that prices Monday pushed above what was psychological resistance at $1,600.00 an ounce suggests more price gains in the near term. Longer-term charts show that Comex gold futures prices are in a 10-year-old uptrend, from the 2001 low of $255.00 an ounce. Gold bulls' next near-term upside technical objective is to produce a close above technical resistance at $1,625.00. Bears' next near-term downside price objective is closing prices below solid technical support at the June high of $1,559.30. First resistance is seen at the overnight record high of $1,610.00 and then at $1,615.00. First support is seen at the overnight low of $1,591.40 and then at $1,580.00. Stay tuned! Jim Wyckoff