More commodity weakness, USD stronger

The commodity selloff continued today although crude lows were set early in Singapore trading hours. The current feeling is we still have some more room to go on the downside. NG fought to go higher but in the end came off about $0.07. We will see what tomorrow's EIA numbers bring to petroleum markets Wed AM.

The Fed left rates unchanged as expected, citing inflation is still atop their list of concerns. Equity markets rallied, which also lifted the energy equities despite weaker petroleum prices. The USD strengthened against the Euro and other major currencies.

Vol remains firm awaiting the statistics Wednesday. For those long volatility, consider selling the options before the numbers. If numbers are bullish, we may see consolidation back to $120 and a vol sell off. Keep in mind, technicals are indicating support levels in the 113-116 area. If vol does come in, the short inventory players should consider hedging by adding some calls at the 130 or 140 level for October or Q4.

CT, New York. 4:30pm Aug 4.