Opening Note:
Following a dip buying spree on Tuesday and a follow through continuation rally Wednesday the market was very quiet yesterday with Energies and foreign Currencies slightly weaker on the day and the rest of the market slightly firmer. While open interest continues to rise in Commodities it appears that fundamentals may finally be taking hold in the Energies markets as the Crude Oil spreads severely widened again yesterday after a corrective rally mid-week. With the spreads this wide and sitting on new lows it is hard to believe that any sort of money allocation will be able to hold prices higher much longer as the sector should begin to weaken further. The Grains on the other hand are finally rocking and rolling with the seasonal trend as Soybeans are leading a bullish push in the sector on demand prospects and technicals despite bearish supplies and overall fundamentals. After trading as one of the weaker sectors over the last week the Metals are showing their resiliency now as Gold looks primed again today to test a close above it's old high trade of $1164 for the year. The European Currencies are again rejecting a technical rally breakout above their sideways range amid concerns of further debt problems in the EU. I believe that with this latest rejection that theses Currencies should be played from the sell side going forward. After repeatedly failing on a bullish head and shoulders pattern over the last few days the Interest Rate markets finally negated the pattern yesterday, but recovered on a trending rally that should lead them back to the highs of their recent ranges. Finally, Equities continue to perform as the strongest sector. Now entering the 51st day of their rally without a correction buying dips still is the profitable way to be playing them, but use caution going forward as potential weakness in the core Energy and Metal sectors could finally snap the rally back to reality.

Buys to Watch:

Soybeans- Led by money flow and technicals the Soybeans finally rallied above the range that they have traded since February. The November chart looks the strongest technically of the Soybean contracts and now has a rally continuation projection from $9.86 to $9.92 1/2. However, it is improbable that November continues to lead the market higher without the old crop leading the way. The May soybeans have a cup and handle pattern with a breakout yesterday of 9.77 1/2 that has a projection to 10.24 1/2. For long entry purposes there is support in the May Beans from 9.77 1/2 to 9.80 1/4. There also is a small low volume zone below this support from 9.74 to 9.76 1/2 for entry on a spike below support. Looking at a weekly chart I have also noticed that along with the Beans the Meal has finally negated it's downward trend and could have more upside pop than the oil. With Crude having downside potential and the outright Meal chart looking much better than the Bean Oil I would also look at buying the Meal and selling the Oil as a spread. Side Note: May Corn has a bullish cup and handle pattern with a breakout level of $3.59 and a projection to $3.74. Because Corn has a bullish pattern despite being the previously weakest Grain market I recommend playing the outright long side of soybeans rather than spreading them against another Grain.

Sells to Watch:

Crude Oil- Despite a furious dip buying rally in Crude on Tuesday the market again found resistance around the $86.30 level and has weakened nearly $2 from this level over the last 24 hours. The nearby May-June and June-July spreads took out their previous lows yesterday and are continuing to weaken today as well. Despite the corrective rally over the last year Crude has had at least a moderate price break each time these nearby spreads have dipped below -$1 as they are now decisively below. I believe that the Crude fundamentals are now catching up to the market and prices will continue to weaken. Although open interest continues to gain in the market holding up prices recently I do not think that there is enough ammo left to rally the market above the now major resistance level from $86.25 to $86.40. As I thought during the break at the start of the week, Crude should travel to support between the $81.80 to $80.80 level on this current leg down, with support at the $82.50 level on it's way down. On a rally there is a decent low volume zone to sell from $85.00 to 85.25.

Put on the Radar:

Gold- The Gold still has the large bullish head and shoulders pattern on it's daily chart with a breakout of $1135 and a projection to $1244. I am still waiting for a close above the previous high trade of the year of $1164.1 to place Gold on the buy list. However, after a very weak attempt at a test of these levels this morning for the fifth time it appears that Gold may not have the strength to climb above these levels. I am watching the the speed line from the lows on March 25th to March 31st for negation of this rally, which has a value of $1148.4 today. I am also watching the Gold vs. Silver ratio (Gold-Silver/2) for a reversal with Gold strengthening against the Silver. Both are likely to occur at the same time, which signals the Metals are fair game to sell.

Notes:

**I ran out of time this morning as the market was very active. The market has had a poor reaction to bullish earnings numbers and news this morning so I recommend playing the short side today. It looks like there is potential for a large break by today's close.