It was announced this morning that consumers are paying off credit cards and purchasing new vehicles. This is now the 11th straight month showing that consumers would rather pay credit cards off. Consumers are still displaying trepidation by borrowing and not spending money out of pocket. Basically, this means people would rather purchase a new car, buy an education, or buy needed items, rather than put clothes or electronics on their credit cards.1

Hasbro showed positive earnings in the last quarter of over 77% apparently; the company sold a ton of action figures and has strong licensing revenue. New movies that are set to preview this year could help the company gain more steam as the year progresses.2

Geithner mentioned this morning that there will be no double dip recession. This is a questionable statement and should not be said out loud. GDP is somewhat decent, companies are showing better earnings, retail numbers have promise - but this does not mean the situation will not turn for the worse.3 Globally, many countries that the United States trades with are having economic issues. Not only does this country have to worry about cash flow, bank worries, Wall Street, and the consumer, but the U.S. must be able to sell products to foreign countries. What if they do not have the money to buy inventory? The S&P is trading at 1063, pretty much flat in pre-market trading as traders try and shake off last week's pummeling. 1046 is the next level that could possibly be reached if the market continues to sell-off. Technicals show that 2 levels were reached last week.

A very rollercoaster-type week in the energy market as Crude rallied in the beginning of the week to $78 before falling all the way back down to $71.50 on a stronger USD and weaker demand. Debt problems in Greece forced the selling of the Euro and that in turn lifted the price of the USD - having a huge effect on the commodity markets as investors sold heavily on Thursday. WTI spreads contracted again as there was a problem with BP's refinery in Whiting causing traders to buy up the front 4 spreads. Heating Oil and Gasoline remained in tandem with each other on the downswing not differentiating from the Crude price at all as both the Heat and Gas crack trade are in the mid $7.50's. Right now Crude looks to be in a downward market and as the 200 day moving average has been broken and the USD has taken a serious step in recovering from the low of $1.52 in the Euro/USD to trade at $1.36.

Natural gas gained in New York as below-normal temperatures and heavy snow forecast along the U.S. East Coast will boost heating-fuel demand. Natural gas for March delivery rose 9.9 cents to settle at $5.515 per million British thermal units. Prices advanced 7.5 percent last week. Natty has now seen a bottom come in at $5.15 and is on its way back up to the $5.70 mark. With Southern Jersey and Delaware being placed on a blizzard warning and getting heavy snow, I believe you will see Natty Gas rise this week - but still not get higher than the $6 top that the market placed in last month.

Blame it on the dollar, but I cannot trust today's bounces.

Prices fell sharply in the soft complex last week. I suspect we may see another volatile week ahead, but not with all the action applied on the downside as much hinges on the dollar and the impact of outside markets. Last week the pressure was on everything in the complex; especially noteworthy was the drop taken in sugar values. Several once-friendly markets chased bulls away which has resulted in severe damage to once-friendly charts. It is my understanding that the bulk of selling pressure was speculative fund liquidation, but wasn't it their buying that helped propel values so much higher in the first place?

As uncomfortable as last week was for the bulls, we may see more pressure; but we also may experience a bounce. A bounce shouldn't surprise and that - so far - is what's on the menu this morning. While I might use such a bounce to liquidate longs, I also might use a bounce to establish short positions in a market like cocoa. As for the other markets in the soft complex... the others seem to have been more overdone and therefore more apt to try and find support, but I do not rule out further weakness as there ought to be some stale bull liquidation. I am not interested in bottom picking unless it is as a day trade only.

Coffee prices pressed below 130 (and are still) but that isn't as bad as what other markets experienced. Is coffee oversold now? Can it continue to hold? Will games be played as heading into Wednesday's option expiration? I doubt any real strength can be achieved to carry KCH much above 130, but 135 and 125 are in play for expiry, act accordingly. Here is some news: http://www.bloomberg.com/apps/news?pid=20602013&sid=agTIkrIC3J3U

Cotton fell on its knees Friday, but was up almost a penny when last I looked early this morning. Seems like the option expiry there got bloody. Bearishness in cotton stemmed from the weakness in outside markets, however the National Cotton Council estimated the plantings will be up by over 10%. Look for the spreads to dominate volume and expect to see the March May spread widen.

Sugar values are up but it’s doubtful they can swiftly resume the trip into new high ground, so look for a range to be established. The key will be how much of a bounce it can muster. Can SBH get back above 27.50-60? Expect a range to be the result once a high price is reached. Will the low from Friday hold? Perhaps, especially now that there is distance from it, but don't rule out a revisit there. In fact, any weakness that picks up a head of steam will likely target that area.

Precious metals were hit the hardest last week with Gold liquidating more than $65 from $1,120 to $1,060, Silver losing $1.50 from $16.50 to $15.00, and Platinum from $1,575 to $1,500 as Greece's debt problems put a significant dent in the outlook of the Euro and the USD rallied against this market and other major currencies taking out the investment appeal for the metal. This week I believe you could see some short covering and profit taking from the significant downward move in these markets as you can get a bit of a dead cat bounce after sharp sell-offs like these. Gold has now broken the support on the downside, breaking the big area of $1,070 and Silver coming off of the $15.50 level. Look for the first few days of the week for these markets to rebound and then look to see how the USD trades against other currencies. Copper had just an awful week confirming the downside move as it blew right past the support of $3.00 and $2.90 to a three-month low of $2.80 on concern that U.S. job losses and European budget gaps will stifle a global economic recovery. The downside looks to have more room ahead to at least the next support of $2.65. There I believe Copper is an attractive buy with some bull plays as prices have not fallen below this level since mid July.

The previous week saw a continued beat-down of commodities due to a strengthening USD coupled with bearish fundamentals. There is little upside light in the trade heading into tomorrow's WASDE report. I am expecting to see a drop across the board in US ending stocks while world ending stocks are expected to move higher due to S. American crops. This is the only fundamental factor that is expected to be in play this week with S. American weather offering little fresh information. On the macro side the trade is looking closely at the USD with growing sentiment that this rally has legs. If pundits are right and the USD moves back to 1.25 versus the EURO then we will have another major leg lower with corn leading the way. Crude is another factor to watch with Ethanol obviously still a major concern with margins falling slowly but surely. Talk of US ethanol into Brazil has not created any real business yet but it’s worth watching. I do not expect this to happen due to improving weather and the improving sugar crop down there.

Looking at relationships is the best bet looking forward. Meal spreads should offer bull potential, corn and bean spreads offer bear potential with wheat sure to gain against corn. Beans should gain against corn adding to the relationship possibilities.

Overall I am bearish but should start the week higher. WASDE will set the tone fundamentally with the USD and crude setting the macro tone.