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Coming Week: Stocks Cleared for Takeoff

The commodity bubble may have finally burst, which could be a breath of fresh air next week to the other markets that have been squeezed by its relentless expansion.

The tumble in the price of oil and other commodities might also give a boost to the retail sector, which is going to see some major action this week, and soften any blows from inflation news.

Crude has seen an amazingly steep decline in recent sessions, and that may continue.

"The momentum has clearly shifted from buy-any-news to sell-any-news. We had a few pieces of data that should have created buying or been neutral, but have created selloffs," says Nathan Golz, futures researcher at Wachovia Securities. "There may just be a general redistribution of investment away from oil and into financials."

"It's a pretty rapid unwind, and my guess is that it has to do with people who made long bets," Golz adds, noting that oil has a key support level in the $107 to $111 range, which was a low touched in the beginning of May.

"Once the trend was up, oil attracted a lot of big money," says Richard Sparks, senior equities analyst at Schaeffer's Investment Research. "Once the trend broke, I think a lot of those big-money players started to exit their positions."

Also key to the commodity reversal is the renewed strength in the dollar, which has been coming back amid weakness in international economies.

Golz says one of the major dollar indices crossed a big resistance point last Thursday, "so now it's off to the races. The big story next week is going to be whether the dollar can hold its gain."

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