I have spent the majority of the day looking at commodities, and it is becoming increasingly clear that a correction is due in the sector along with energy.

As we get closer to the election in November, energy prices will meander lower. Unlike 2004, however, we may not see energy rebound as quickly. News of a slowing economy could bring a sharp pullback which may last into the winter months.

Now that the small investor has jumped aboard the energy train, big traders will look to take profits. The game is fairly simple, wherever the smaller investor thinks there are sure profits; this is the area to be careful of (I.E. - NASDAQ, Real Estate, Commodity Funds, Hedge Funds etc...).

As far as energy and commodities are concerned, the longer term bull market is intact. I will be looking to increase my exposure in both areas on sharp pullbacks.