"Deflation is the absolute worst environment for investors because all assets decline sharply and economic activity grinds to a halt," says Eric Roseman.

In his Commodity Trends Alert he adds, "Every sector of the commodity complex has tanked, including a few areas that I believe should be appreciating because of bullish demand." Here's his outlook and top picks in the oil and gold sectors.

"Global growth forecasts are being revised lower virtually daily. Until we transition from an environment of rapidly falling prices, commodities, stocks, bonds (except Treasury debt) and real estate will continue to decline sharply in value.

"I suspect the global central banks and government authorities will continue to throw everything they’ve got at this crisis until prices stop sliding.

"This will include trillions more in bailouts, the nationalization of banking and a wave of interest rate cuts. Not one corner of the globe is safe. Everyone is in this together.

"I have to confess to never witnessing anything like this before; almost daily, commodities are following stocks to the basement and hitting new lows. The market is starving for liquidity and everyone is running into dollars. Cash is king.

"Gold has been a first-class disappointment amid bank failures, bailouts, credit collapses, etc. This should have been the year for gold. The rapid desperate flight to liquidity has hurt gold because investors want cash – nothing else.

"It’s the race to cash that has pricked gold. Yet, there’s no other way to save the financial system as we know it other than printing like mad.

"t will take time, but over the next 12-18 months the Fed and other central banks will arrest deflation; gold will recover and so will the gold stocks long before deflation peaks.

"I’m still buying the gold stocks in this wreck. I added to my existing positions in Goldcorp (NYSE: GG), Silver-Wheaton (NYSE: SLW), Kinross Gold (NYSE: KGC) and Barrick Gold (NYSE: ABX). These stocks now trade at three-year low and in some cases, five-year lows."

"I’m also a long-term energy bull. So I therefore ask myself if I don’t buy the major oil companies now at these distressed levels accompanied by fat dividends, then when?

"The oil stocks are trading right at the basement. I’m holding and accumulating ENI (NYSE: ENI) of Italy, France’s Total (NYSE: TOT) and Russia’s Lukoil (Other OTC: LUKOY).

"All three stocks trade as ADRs in New York, sell at multi-year lows and pay dividends. Lukoil, the world’s most undervalued major oil concern, has been ripped to shreds by the Russian stock market collapse and crude’s 50% plunge.

"Within these commodity sectors, over the next 12-18 months, we’re going to wake-up and find some of the most compelling values in stocks since the mid-1930s. We’re almost there now. The stock market and commodities, at some point, will find a bottom, if only an intermittent low."