As the first half of 2009 draws to a close, it's certainly proven to be a trader’s market, with many opportunities to make money both long and short. After an ugly start in the first quarter, equity markets have rallied back to break even on the year -- and they look like they could be setting up for a retracement rally back to the 1000 level on the S&P 500.

While I believe this equity rally will ultimately be of the bear-market variety, it should provide a good opportunity to sell under-performing equities and position for what could be a difficult second half of the year.

Let’s go through some charts to recap my calls for the first half of 2009 and chart a course for the rest of the year.

Looking at the weekly chart of the S&P 500 with Fibonacci retracement lines, you can see it's grinding higher towards the resistance bands. The 0.382 retracement comes into play just above 1000, while the 50% retracement is just above 1100. I think, at a minimum, the S&P 500 should rally into the 1000 level -- and with the massive amount of liquidity the government's been printing, I wouldn't be surprised to see the S&P 500 defy gravity and rally through the 1100 level.

Keep in mind this is most likely a bear-market rally and these resistance levels should be used as points to lighten up on equity exposure.

                                  
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1. I've been watching PowerShares Water Resources (PHO) for a while here as one of the few equity products I think is a decent buy with a solid long-term macro theme. I recommended adding to PHO around $12 towards the end of last quarter, and it's now pushing $15. I think PHO should continue to benefit from the equity rally, and I still think it could rally into the high teens. However, if the second half does prove to be rough on equities, I'd raise your stop on PHO to 13.50 to manage risk. Otherwise, keep riding the trend higher and look to lock in some profits in the high teens.

                                  
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2. The agricultural commodities have definitely provided some nice trading opportunities in the first half of 2009. Corn was a recommended buy in the mid $300s and had a nice run towards my $500 target, before rolling over recently.

I still like corn as a long, and would recommend adding here since it's sitting right on support at the 200-week moving average. This should provide support for a rally -- and I think $500 could be a conservative target for corn in the second half of the year. If you were lucky enough to add to corn in the mid $300s, I'd raise your stop to $350 to manage risk, just in case the 200-week moving average can’t hold here.

                                  
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