FROSTY FUTURES MARCH 20, 2003

TECH DATA FOR FRIDAY MARCH 21.

DOW R=8330; 8380-90; 8515. S=8250; 8205; 8130; 8100; 8060.

SPX R=880; 889; 899. S=872; 867; 859; 852.

NDX R=1090; 1099; 1110. S=1074; 1064; 1052.

JUN TBOND R=11108; 11128. S=11012; 11024; 10900.

JUN GOLD R=338; 341; 346; 353. S=333; 323.

MAY SILVER R=446; 449; 456; 463; 470. S=439; 434; 429.

MAY CRUDE R=2910; 3120. S=2770; 2720; 2680; 2600.

JUN DOLLAR R=101.90; 102.20. S=101.40; 101.20; 100.95; 100.40.

MAY BEANS R=576-78; 581. S=569; 562-60; 550.

MAY WHEAT R=304; 311; 322. S=293; 290; 285.

INDICES

 Momentum on the upside has waned compared to the initial jump. The Dow is at the 100-day MA (8316), that coincides with a .618 retracement from the January high to the March low. So what happens from here will be telling. Tomorrow (Friday) is quadruple witching day (with the advent of single stock futures) so, as warned on TV, we should expect and be prepared for some extra volatility. Keep in mind in history, after long declines in stocks, the first 20-30 per cent rally usually happens very fast. So if you are not in, it will take years to make any appreciable gain in stocks unless you get excellent intelligence and buy stocks that either exceed gains achieved in the averages or get picked up after the averages have moved, and which then catch up. Good luck with that.

INTEREST RATES

 There is no reason to believe that rates will decline. The only thing we can do is follow the charts, watch for identifiable patterns and act accordingly. Those of you who were smart enough to hedge your bond portfolios should maintain your hedges. How high might rates go? In my opinion, they could double. And they would still be historically low. Those of you who can follow the yield-curve can make plays in spreads between the long and short end of the field. Don’t get too extreme, for example, don’t do bills against the long bond. Stay with realistic comparisons, like the 10 year-30 year spread or the note-bill spreads. If you get too far apart you might as well just trade the long end and limit the number of decisions you have to make.

METALS

 Gold and silver remain under pressure. For the time being traders are paying more attention to the comparable value of intangibles (paper bucks and stock certificates) relative to economic health rather than the amount of liquidity provided by the Fed and the money supply provided by Treasury. How long that span of attention lasts is anyone’s guess. But the piper has to be paid or we won’t get the children back. So we (read you) have to be prepared for gold to test 320-300. But it is a difficult play because we can’t foretell when emphasis will shift. Sorry. Copper still looks bearish, and a test of 7450 should be in the cards very soon. The 100-day MA is at that area of congestion so the odds increase of a test of that level. If resistance at 8000 is taken out then another six or seven cents could be added.

CURRENCY

 My Dollar chart is kaput, so when I get it fixed I will comment on it. In the meantime please stick with the technical data provided above and everyday to subscribers and customers.

ENERGY

 Don’t get too carried away with the drop in crude price. Today’s activity filled a gap on the charts left last December near 2860. Trend line support, on continuation daily charts, is seen at 2600. Many traders are expecting, because of the momentum behind this drop, for price to overshoot the mark. It may, but then again, it may not. Just pay attention to the above mentioned levels.

GRAIN

 Apparently there is only a skeleton crew left in the grain pits for the time being. All the action is in the indices and energy pits. Thin trade does not admit accurate forecasting. So be careful in this arena.

SOFTS

 Cocoa is bound within a range between 1900-2100. Like the Fed chairman implied: "I don’t have a clue." Coffee at 5600 was cheap enough for traders to step in and begin to place a weather premium in the equation. Resistance at 6300 on the nearby contract will be pretty tough to penetrate. But it’s worth watching. Sugar cut through the 100-day MA, retested that level and dropped again. Resistance is 780-810. A failure at that level could indicate a test of 640. Cotton appears to be putting in a top. Check out the July daily chart and form your own opinion. Mine is that it needs to be sold with a stop above the double top. Warning about this market, it is manipulated by some very large traders and can be exceptionally volatile and difficult to hold a futures contract if you are a small trader. In the end the signals almost always prove to be accurate. OJ remains in a basing formation and is attempting to breakout to the upside. Lumber is reflecting the drop in new housing starts. I wouldn’t expect anything large out this pit for awhile.

CONTACT ME: williamfrost@comcast.net or call 800 825 0109, code 04 or 615 331 8567.

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Trading futures is for individuals willing to assume greater risk for the opportunity of greater rewards. Only speculative capital should be used. Past performance is no assurance of future profits. Information contained herein is believed reliable but original sources of data have not been independently verified therefore is not guaranteed. Ideas and suggestions are the opinion of the writer and are subject to change at any time. Nothing herein should be construed to be a solicitation to trade futures or options. Hedgers should have a defined plan..