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Base and precious metals no longer appear to be correlated, Treasuries inverse relationship to indices no longer exist, dollar up equals commodities down right...wrong. When things do not make sense take your position size down.

Mixed results in Crude today with the front month lower and back months gaining. Take for instance just the first 2 months at the beginning of April this spread was at a 25 cent discount and today it is approaching a $3.00 discount. We got the trade over $87 in June we were looking for but without a new contract high over $87.59 in the coming sessions we expect a set back. We are still advising energy traders to use the most recent spike higher in prices in the distillates to take off longs. Last weeks lows have held so far in natural gas as prices picked up nearly 2% today. We've yet to make a move but for the right price in the coming sessions we like buying clients August and September call spreads. Contact us for more precise details.

Inside day in the indices but the bounce back is impressive. Continue to use the 20 day MA on the daily charts as your pivot point. We've been anticipating a correction like most but it has yet to materialize. Coffee was higher by 2.4% today lifting prices back to the 100 day MA. On a trade above $1.40 in September clients should hit their profit orders...check back tomorrow as today's settlements should come in about $100 less than their limit. Not yet but at some point this week clients will likely be buyers of October 10′ and March 11′ sugar...stay tuned. Euro-dollars were off nicely today; aggressive traders could be short futures with stops above the recent highs. Clients will be using this rally in Treasuries to get short futures...stay tuned.

Clients are long June 30-yr bond puts expecting a trade closer to 116′00 in the coming weeks. Agriculture was in the red today with soybeans and soy meal suffering the most. Expect to buy this correction but from lower levels; closer to $265 in July soy meal and $9.40 in July soybeans. June live cattle traded higher for the third session today back near 96 cents. We may not get the correction anticipated in cattle so we need to go back to the drawing board...stay tuned. If hogs fail to rally tomorrow we will most likely be adding to shorts for clients.

We're still thinking the gap in the charts about a nickel lower needs to be filled. Gold traded to fresh highs but it just does not smell right so we advised clients to liquidate their long future and options at a small profit and move to the sidelines for the next 24-48 hours. We are still waiting for a correction in silver to get clients positioned long. We missed the most recent correction and seem to be reminded of it every day. That is not necessary and we should be there next time. Copper broke the 100 day MA today and has given up over 30 cents in the last month; clients remain short looking for more.

We advised clients to take a profit on their Pound shorts today around 1.5250. We expect currencies to trade off the dollar this week; a close above 82.50 expect more upside and on a close below 82.00 expect more downside. The RBA should raise IR 0.25% tomorrow so 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.

There may be a number of reasons why but the bottom line is volatility in the commodity markets is here to stay. June Crude oil is back above the 20 day MA having gained $4 on its way to $87 in our opinion. RBOB and heating oil are on the verge or breaking out to new highs; we suggest taking profits on up days because IF we get a correction the distillates are more of a challenge to trade out of. Natural gas was lower by nearly 8% today on a bearish inventory report; on a new low take a loss on long futures. Clients just missed their entry order on their September 50 cent call spreads today, they will try again tomorrow.

Indices are back above the 20 day moving average; continue to use that level as the pivot point. Fresh short entries should have taken a small loss being we settled above 1200 in the S&P. Sugar looks to be making a bottom and after 11 straight down weeks it is about time. Clients will be approaching October from the long side next week if we see more positive action tomorrow. Make sure you put in profit orders on your coffee as this market can be quite volatile; we're anticipating a trade of 5 plus cents to the upside. Clients 30-yr bond puts got hit a little today. We suggested holding as we still see a trade closer to 116′00 in the June contract next week. More buying from China helped corn in early dealings but we did taper off by days end closing only 1.4% higher. July outright calls are picking up as well as December futures but some of our clients still need to lift their short July hedges. We suggest on a setback to do so even if it is at a small loss and expect to make that up on your December longs.

We continue to feel KCBOT ad CBOT wheat are a sale above $5. Lean hogs were lower again today but we think more sellers will appear on a breach of the 20 day MA; in June at 83.45. Clients hold a small long in gold options expecting $1200 in the coming weeks. Silver was higher by 2% today recouping the losses from the prior three sessions closing at $18.50 today. Clients have very minimal long exposure in futures. We will be looking to buy dips but may need to raise our buy objective...stay tuned. Copper has failed to break the 10 day MA the last two sessions, when it does look for 10 cents quickly. Clients were able to but the same June Pound put options liquidated yesterday at a profit back on close to their original entry price. We are looking for prices to fall off again into next week.

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

Does moral hazard even exist anymore? The list goes on auto-companies, banks, insurance companies and now countries. Crude closed lower today for the fourth consecutive day and below the 9 day MA for the first time in 10 sessions. We are operating under the assumption that prices will make an attempt at the 20 day MA at $83.03 in May. Clients are advised that if we see a trade down to $82/83 and it holds we will have some bullish suggestions. Natural gas continues to consolidate as a base appears to be forming.

Today's action was not super bullish but at least we did get a higher high and higher low. We are recommending scaling into June futures as well as purchasing July 50 cent call spreads. We are waiting for a signal from the markets that an interim top has been made in indices but have yet to see it. If and when we will be looking to re-position clients short vie June ES shorts and or put options. May sugar traded above the 20 day MA for the first time since the first week of February when prices were at 27 cents/lb. On a settlement above that level we will be looking to buy calls in July and October for clients. In today's trade we initiated some spreads for clients; buying May and selling October anticipating the spread to narrow and May to go back to a premium.

Cotton continues to be a sell rallies market as long as July does not settle above 80 cents. Those that have yet to buy OJ we suggest scaling into longs as we anticipate a bounce. Allow 30-yr bonds and 10-yr notes to rally more before initiating shorts. We expect to see a trade closer to 118′00 in both instruments this week or next. Corn was higher on the day but we would like to see a settlement above the 20 day MA in the coming days; that level is $3.54′4 in May. Aggressive traders could be short June lean hogs and June live cattle with stops above the recent highs. We're pricing out delta neutral strategies in August cattle and should have suggestions in the coming sessions. Could today have been a key reversal in the metals?

May copper closed almost 15 cents off its highs, gold $15 off its highs and silver 40 cents. At the moment we will not get short gold or silver though we think new buyers should remain on the sidelines as we could see a $50 move lower in gold and $1 lower in silver very easily in our opinion. We suggest buying out of the money December puts in copper thinking we will make a seasonal high some time in April/May.

The dollar traded to its lowest level in 3 1/2 weeks and if 80 is penetrated that would confirm an interim top. Dollar weakness would most likely translate to a move north in the Euro, Pound and Swissie. We will be looking to sell these rallies from higher levels with clients...stay tuned. If we do get a move south in energies and metals we should finally get the Loonie moving down. Clients are selling rallies and buying June puts lightly.

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

Huge build in Crude inventories and still oil held it's own with May probing $80/barrel but it appears we will close above that level. Our negative bias still exists but what will it take to see a trade to $77/78 is beyond me. Natural gas looks to be building a solid base just above $4. The risk/reward at these levels favors longs in our opinion. We are suggesting scaling into May futures with stops just below the recent lows and purchasing June 50 cent call spreads (i.e. $4.25/4.75).

Indices look overbought but have for weeks now...brave clients are sticking with the June put options. Today they purchased June 1050 ES puts for $550/per. Sugar came within 17 ticks or 16 cents and then closed 9% off that low. Buyers were active but I want to ensure this is just not another head fake before trying to get clients long again. May cotton is back below the 20 day MA losing 1.50 cents today. We are expecting further down side and have a target or 78.00 and then 76.00. OJ paired losses but did close lower now for 7 out of the last 8 sessions dragging prices back below the 50 day MA. We have told clients that we are interested in re-visiting longs under $1.30.

Treasuries were hit hard across the curve today; likely due the exorbitant auctions. We may NOT get the opportunity to sell from higher levels as we had expected but if prices continue south it will be without our clients. Corn and KCBOT were the lone agriculture commodities to keep their head above water today. You know the deal; we are suggesting long exposure via futures and options in July and December corn. Some of our clients that trade spreads may be interested in this: long December KCBOT wheat against a short in December CBOT wheat at 7-9 cents under expecting the spread to flip and KCBOT to be at a premium. Let cattle rally a little more and look to fade the rally; June would need to be contained at 94.00 and August at 92.00 or we would abandon the trade. Lean hogs continued lower; we expect a trade under 70.00 in coming sessions.

Precious to industrial metals were hit today; gold 1.70%, silver 2.6%, copper 1.5%, palladium 4.7%, and platinum 1.8%. We are looking for more downside pressure in this complex especially if the dollar can stay above 82.00. The significance of the 82 level in the US dollar index serves as the 50% Fibonacci level for the last 2 years. Use 81.25-81.50 as support with 84.00 as the next stop on the upside. The Yen got hit the hardest today and though I did not take people seriously who were whispering par just weeks ago this could happen. We are pricing out bearish plays for clients. If the Loonie can break the 20 day MA; at .9740 in June we should be on our way to a nice winning trade on clients June puts.

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

One bonus of the global recession is that it wiped a lot of incompetent hedge fund managers and energy speculators from the canyons of Wall Street. As the Gordon Gecko sycophants regroup and look for the next Big Thing, maximizing profit while minimizing risk, the landscape looks very different than it did a year ago. In such a climate, it is uranium, not oil and natural gas that would seem to have the brightest future for one simple, overriding capitalist principle - supply and demand.

Whatever agreements are reached at December's global climate warming summit in Copenhagen, they can only boost uranium's appeal, as the carbon footprint of a nuclear power station consists primarily of the carbon cost of mining uranium fuel, not a nuclear power plant (NPP)'s operation. According a University of Wisconsin study, NPPs only emit about 17 tons of carbon dioxide per megawatt, little more than wind and geothermal power, the lowest sources. In contrast, coal has the highest carbon emissions at about 1,000 tons per megawatt. Accordingly, expect to see many nuclear power cheerleaders emerge in Copenhagen.

Consider - two years ago, London's World Nuclear Association in May reported that worldwide, 256 reactors were either in the planning stage or under construction. Even Ukraine, site of the infamous 1986 Chernobyl disaster, has announced plans to build 22 new nuclear power stations, while the United States, site of the 1979 Three Mile Island partial meltdown accident, has 23 reactors being proposed. These new reactors would be in addition to the 439 nuclear power reactors worldwide in 31 countries generating 372,000 megawatts reported by the International Atomic Energy Agency, an increase of 58 percent, all needing fuel.

According to the Wall Street Journal on November 29, "Iran announced a massive expansion of its nuclear program. President Mahmoud Ahmadinejad unveiled in a cabinet meeting plans to build 10 more nuclear facilities for enriching uranium."

The nuclear issue even impacted last year's U.S. presidential election, as Republican nominee John McCain committed his administration, if elected, to begin planning for the eventual construction of 45 new nuclear power plants in the United States by 2030, twice the number currently on the drawing boards.

Europe is also interested in expanding its nuclear power industry, which represents 45 percent of the world's currently operating nuclear facilities and 33 percent of new reactor construction. European nations currently operate 197 nuclear power plants generating 169,842 megawatts, and 12 European countries are planning or considering proposals for up to 67 additional reactors.

The recent revelations of a International Energy Administration whistleblower that the IEA may have distorted key oil projections under intense U.S. pressure is, if true (and whistleblowers rarely come forward to advance their careers), a slow-burning thermonuclear explosion on future global oil production. The Bush administration's actions in pressuring the IEA to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves have the potential to throw governments' long-term planning into chaos.

Whatever the reality, rising long term global demands seem certain to outstrip production in the next decade, especially given the high and rising costs of developing new super-fields such as Kazakhstan's offshore Kashagan and Brazil's southern Atlantic Jupiter and Carioca fields, which will require billions in investments before their first barrels of oil are produced.

In such a scenario, additives and substitutes such as biofuels will play an ever-increasing role by stretching beleaguered production quotas. As market forces and rising prices drive this technology to the forefront, one of the richest potential production areas has been totally overlooked by investors up to now - Central Asia. Formerly the USSR's cotton "plantation," the region is poised to become a major player in the production of biofuels if sufficient foreign investment can be procured. Unlike Brazil, where biofuel is manufactured largely from sugarcane, or the United States, where it is primarily distilled from corn, Central Asia's ace resource is an indigenous plant, Camelina sativa.

Of the former Soviet Caucasian and Central Asian republics, those clustered around the shores of the Caspian, Azerbaijan and Kazakhstan have seen their economies boom because of record-high energy prices, while Turkmenistan is waiting in the wings as a rising producer of natural gas.

Farther to the east, in Uzbekistan, Kyrgyzstan and Tajikistan, geographical isolation and relatively scant hydrocarbon resources relative to their Western Caspian neighbors have largely inhibited their ability to cash in on rising global energy demands up to now. Mountainous Kyrgyzstan and Tajikistan remain largely dependent for their electrical needs on their Soviet-era hydroelectric infrastructure, but their heightened need to generate winter electricity has led to autumnal and winter water discharges, in turn severely impacting the agriculture of their western downstream neighbors Uzbekistan, Kazakhstan and Turkmenistan.

What these three downstream countries do have however is a Soviet-era legacy of agricultural production, which in Uzbekistan's and Turkmenistan case was largely directed towards cotton production, while Kazakhstan, beginning in the 1950s with Khrushchev's "Virgin Lands" programs, has become a major producer of wheat. Based on my discussions with Central Asian government officials, given the thirsty demands of cotton monoculture, foreign proposals to diversify agrarian production towards biofuel would have great appeal in Astana, Ashgabat and Tashkent and to a lesser extent Astana for those hardy investors willing to bet on the future, especially as a plant indigenous to the region has already proven itself in trials.

Known in the West as false flax, wild flax, linseed dodder, German sesame and Siberian oilseed, camelina is attracting increased scientific interest for its oleaginous qualities, with several European and American companies already investigating how to produce it in commercial quantities for biofuel. In January Japan Airlines undertook a historic test flight using camelina-based bio-jet fuel, becoming the first Asian carrier to experiment with flying on fuel derived from sustainable feedstocks during a one-hour demonstration flight from Tokyo's Haneda Airport. The test was the culmination of a 12-month evaluation of camelina's operational performance capability and potential commercial viability.

As an alternative energy source, camelina has much to recommend it. It has a high oil content low in saturated fat. In contrast to Central Asia's thirsty "king cotton," camelina is drought-resistant and immune to spring freezing, requires less fertilizer and herbicides, and can be used as a rotation crop with wheat, which would make it of particular interest in Kazakhstan, now Central Asia's major wheat exporter. Another bonus of camelina is its tolerance of poorer, less fertile conditions. An acre sown with camelina can produce up to 100 gallons of oil and when planted in rotation with wheat, camelina can increase wheat production by 15 percent. A ton (1000 kg) of camelina will contain 350 kg of oil, of which pressing can extract 250 kg. Nothing in camelina production is wasted as after processing, the plant's debris can be used for livestock silage. Camelina silage has a particularly attractive concentration of omega-3 fatty acids that make it a particularly fine livestock feed candidate that is just now gaining recognition in the U.S. and Canada. Camelina is fast growing, produces its own natural herbicide (allelopathy) and competes well against weeds when an even crop is established. According to Britain's Bangor University's Centre for Alternative Land Use, "Camelina could be an ideal low-input crop suitable for bio-diesel production, due to its lower requirements for nitrogen fertilizer than oilseed rape."

December copper futures on the Comex division of the New York Mercantile Exchange on Wednesday hit a fresh 14-month high of $3.1720 a pound. Price action this week has also seen a bullish upside technical "breakout" from a sideways trading range at higher price levels that had been in place for three weeks.

The red industrial metal is also in an 11-month-old uptrend from the December 2008 low of $1.3115. The copper bulls this week have gained fresh technical momentum and their next upside price objective is pushing and closing December futures prices above technical resistance at $3.2500 a pound. If nearby copper futures produce multiple closes below what is now solid technical support at the $3.0000 level, then bullish enthusiasm would be dented and that would be an early technical clue that a market top is in place.

Veteran market watchers know the copper market can be an early indicator of price action in other major commodity markets as well as the U.S. stock market. If the copper market starts to back down from its highs, that would also be an early bearish warning signal for the other raw commodity markets as well as the U.S. stock indexes. Stay tuned! Jim Wyckoff.

The housing market's impact on the entire economy can not be understated. As nearly two dozen sub-prime mortgage companies have gone under in the past few months, economists are beginning to worry that the real estate collapse may soon spill over in to other areas. Even Alan Greenspan, the perennial optimist, admitted today that the country is on the brink of a recession. To many, the timing of these bankruptcies were unpredictable. But for those who watch the copper market closely, much of this could have been predicted.