The dollar's choppiness has created a bit of a seesaw rally in a few commodity sectors. This congestive price action is not altogether uncommon amongst markets in an intermediate trend change. The dollar is unlikely to consolidate for much longer and I continue to expect a rally to ensue to 83, pressuring commodities and implying an inversely correlated decline in stocks. Energies A wicked pennant consolidation above trend line support is indicating a volatility breakout in oil next week. My bias is to the downside as the dollar's anticipated strength pressures global demand for oil and drives prices to break below critical support. A close below $80 on the Dec. contract should offer technical confirmation, along with psychological pressure, and send prices falling. Heating oil is no longer a seasonal play against rbob, with an early start to winter potentially priced into this relatively wide spread. Sell heating oil against long rbob. Natural gas remains a long term call buying opportunity. Financials Stocks remain choppy as they setup a failing technical structure below key resistance at 1216.75 and 1193.00 respectively. Anticipated strong selling in stocks this week is likely to support bonds, but overall the bond market is choppy and not worthy of a long. The dollar is the play with strength expected in coming weeks and a rally to 83 by year's end pressuring the euro and pound. The Aussie and Canadian dollars may offer flight to quality buys, but I recommend selling the bounces as these markets are overbought and ready to trend change to bearish. The yen seems unable to hold any declines as dollar strength does not necessarily mean yen weakness. A flight to quality play in the yen is benefitting from selling in the euro and investors migrating money there. Moreover, dollar declines are often helping to surge the price of the yen, so a yen rally in any market condition means hysteria buying demand. I wouldn't be surprised if the market runs to 12522 then sells off a bit, but I would recommend buying the dips and continue to stand by my forecast that: The Japanese Yen futures will hit 140 before 80 or I will quit writing the Weekend Commodities Review.forever. Grains Grains continued higher last week, following alongside a dry weather supply concern in the wheat market. Corn broke topside resistance in the overnight this evening, but if the market fails to close above 5.88 it could be an area that the market sets its high. Overall the choppiness in the dollar is allowing grains to run free with this commodity bull surge, but the continuation of this rally is in doubt. Play short grains after the corn market fills its gap and closes below the gap.

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