FROSTY FUTURES MAY 1, 2003

TECH DATA FOR FRIDAY

DOW R=8490; 8530; 8560. S=8340; 8305; 8290; 8260.

SPX R=920; 922; 924. S=903; 898.

NDX R=1120; 1123; 1127. S=1100; 1094; 1085; 1081.

USM R=11410; 11427; 11504. S=11327; 11318; 11226.

USM R=11410; 11427; 11504. S=11327; 11318; 11226.

GCM R=344; 348. S=338; 331; 329.

SIN R=479; 484; 490. S=472; 468; 463.

CLN R=2596; 2612. S=2565; 2530; 2515.

SN R=637; 642; 647. S=627; 621; 617; 606.

WN R=284; 287; 291. S=280; 279; 275.

INDICES

Resistance is stiff near the 8525-8550 area. But existing "backing up" should not be interpreted to mean a top is in. More than likely the decline will prove to be the bull backing up to gain momentum. The "fence" is to be crashed through and the heifers in the upper field are to be "covered." I am placing a target for next week near 8845 on the Dow. The current "flag" formation is usually interpreted to indicate a continuation pattern. It began from below and should break to the upside. Next target on SPX is 940. And, on the NDX resistance is seen at 1140 and 1151. To destroy enthusiasm for the market will take closes below Dow 7910, SPX 860 and NDX 1120.

INTEREST RATES

The longbond reversed today but still managed a higher high and higher low. That being said, the market is vulnerable to a close below 11218 tomorrow which would present players with a key reversal on weekly charts, a very bearish signal. I know there is no assurance that will happen, but bond players need to be aware of the possibility. If such happens not to be the case, then we will expect some consolidation to begin on the daily charts.

METALS

Action in the gold pit, and as seen on daily charts, indicate sustained strength. Near term target for June is 357. I mentioned to you the fact that some large copper traders were on their way to Chili to attempt to convince mine operators to cut back on production. I mentioned that, if successful, copper price would be supported but silver should have a fire set under it. Well, we have seen in silver the biggest two-day move in quite some time.

CURRENCY

The Dollar has a target of 9500 given the current pattern on daily charts. Currencies are among the best of trending markets so sell rallies. As of today's close the market appears to be oversold or caught in a downdraft. Resistance is back up near 9810-9850.

CATTLE

The spread is too large between cash prices and June futures, hence the rally. It remains to be seen, but not for long, if resistance at 7230 can be taken out. In the very short-term it either will be or not. If it is, a target for bulls becomes 7420; if it isn’t then a target for bears 7060 and maybe 6930. Feeders give the impression traders are willing to pay up for cattle and hold a very bullish outlook after summer is past. OK, no argument, but summer still has to be dealt with. Don’t get carried away with bullishness in cattle now. It has rarely paid to do so this time of year.

ENERGY

Bulls have to be a little disappointed after having waited so long for their 2500 target to be obtained and see such a small rally unfold. Smaller than expected builds in stocks didn’t help much. The downside target, based upon chart considerations, is now 2300. Resistance is loose, so as some analysts warn, "whiplash" rallies must be expected and incorporated into one's trading plan.

GRAINS

Corn is in consolidation near lows. Wait before deciding what to do until a clear breakout is completed and validated by a couple of day’s trade. Beans, it is obvious, has very few traders who are willing to go home long. That is the reason for midday rallies and subsequent selloff’s near the close. The reason for the rally is the weather; some dryness in the Midwest. Many traders are using wheat as a spread leg. Notice the daily pattern, opening on lows, rallying and then selling back off. This is telling us to watch those spreads. Right now beans are favored leg on long side. This will change. I can’t tell you in advance exactly when, but I will tell you that it won’t be long before that change takes place.

SOFTS

Not much new news out of Ivory Coast relative to cocoa. A rally from last week’s lows didn’t take out any important resistance and the market remains in static pattern. Coffee ran into some selling as it neared old resistance. That old resistance is a flag (bear flag at the time) with range of 6850-7450. Current support under July coffee is near 6600. If you folks followed my recommendation last week to sell sugar and place stops above 775 on the July contract you had the opportunity to take profits under 700. But even if you didn’t you should be short July sugar with stops, now ,above 755. Honor those stops. July cotton resistance will be strong for awhile at the 5680 level. Support at 5525 is suspect at best. God support is seen near 5300. Well financed traders should have good-till-canceled buy orders on July OJ at 7900, 7500 and 7200. These guys are really tough to take money away from but it can be done. Call me stubborn or whatever, but there is absolutely no reason that I know of this year for OJ not to rally this summer. If you don’t want to flirt with first notice days then watch the July contract and place your orders in the September contract.

CONTACT ME: www.frostyfutures.com or call 615 331 8567.

Trading futures is for individuals willing to accept greater risk for the opportunity of greater reward. Only speculative capital should be used. Information provided is garnered from sources believed reliable but no independent verification has been made therefore no guarantees as to accuracy of data is implied. Ideas and suggestions are the opinion of the writer and are subject to change at any time. Nothing contained herein is to be construed to be a solicitation to trade futures or options. Hedgers should have a defined plan