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After all the huge moves we experienced yesterday, one would expect follow through today, which did not happen. Next week as a new month begins, it will be critical to pay attention where the money flows.

As long as Crude does not make new highs we like scaling into bearish short exposure thinking an interim top was made this week. Once prices roll over a leg lower should drag prices down to between $85-87 barrel in the December contract. Natural gas picked up 4% today and is bumping up against the down sloping trend line that had served as for resistance for the last six months. The next few sessions will be critical to see up we finally have a technical reason to buy … stay tuned.

No follow through in stocks today as prices failed to make a new highs on a narrow trading range. Clients hold bearish plays in ES options and are currently under water. Support is seen at 1250 followed by 1215 and ultimately our target at 1185 in the S&P. Treasuries traded lower two out of the last three weeks but the picture still is not clear so we would recommend the sidelines in this complex.

Gold will close slightly lower but manage to remain above its 50 day MA; in December at $1737. This week’s action was one sided and the bulls are clearly back in the driver seat but do not rule out wild swings, use some sort of strategy to mitigate risk i.e. stop loss orders, options or keeping your size small. Silver remained above the 40 day MA closing slightly higher above $35/ounce now for two days. We see support just below that level with resistance between $36.50-37/ounce.

With the Yen near contract highs we still like scaling into short exposure … this trade has not started to work but on a BOJ intervention which we still anticipate expect a quick 300-500 point move.

Sugar gave up 2.6% today closing near the weekly lows. We suggest bearish exposure looking for a trade below 25 cents next week. After a massive run that lifted OJ prices nearly 25% prices have started to come off and should trade lower in the coming weeks. Corn closed above the 200 day MA so we would cut losses on all shorts and move to the sidelines. Clients have been whipsawed in soybeans as this market cannot make up its mind on direction. Some clients hold small bullish exposure in January contracts and are under water. From here it will take a trade back near $13.20 to get these trades profitable once again. We think that is feasible in the coming weeks … trade accordingly. Live cattle have retraced 61.8% closing today at one month lows. On lower trade next week we will be offsetting clients' remaining shorts and potentially reversing advising bullish exposure in 2012 contracts … 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.

Source: Today In Commodities: No Follow-Through