FROSTY FUTURES MAY 30, 2003

TECH DATA FOR FRIDAY

DOW R=8770; 8862. S=8680; 8630; 8540.

SPX R=953; 960. S=946; 935; 928.

NDX R=1190; 1199. S=1172; 1165; 1150; 1124.

USM R=12027; 12118. S=11927; 11904.

GCQ R=374; 381; 388. S=366; 358; 353.

SIN R=464; 471; 478. S=454; 446.

DXM R=9330; 9370; 9400. S=9235; 9200; 9140.

CLN R=2940; 2965; 3060. S=290; 2825; 2780.

SN R=634; 642; 651. S=618; 616; 606.

WN R=329; 335; 341. S=316; 305; 297.



INDICES

Several big time investors have told us that we will have more opportunities to buy stocks at lower prices. Insiders like Turner, Dell, Ball et al, are selling holdings in their own companies to diversify, they say, holdings. On the other hand professional money managers, under severe scrutiny, are selling huge bond holdings to convert portfolios to reflect larger common stock holdings. So what are we to think? Take a step back and look at a monthly chart on any of the major indices. The Dow could easily come back into the 7500 level without busting up the consolidation extant since July ’02. Would a thousand point drop upset money managers of huge pension plans? Not likely, if they believe the fundamentals are in place to hold and rally from there. Would that make the likes of Warren Buffett and Jimmy Rogers correct? Yes it would. Should we prepare ourselves for a sharp drop? As of tonight’s close I have to say the market is vulnerable, technically, for a drop. How big and how fast I can’t say.

INTEREST RATES

The longbond is in a trading range from 12200-11816. That’s three and a half points. Inside that range is a day traders territory. Outside that range is an indication of the economy slipping into depression or growing into greater value. Lower rates and higher bond prices indicate depression. Higher rates and lower bond prices indicate the economy is strengthening. Make your bets, take your chances.

CURRENCY

My eSignal charts only go back to January of ’96 on the Dollar index. Support begins to strengthen at 8800.

CATTLE

Tight supplies are being reflected by high prices all along the chain. From record high boxed beef price to astronomical retail prices for a good steak at the local grocery demand will be curbed. You have read it all if you have read any of it. When Canadian beef begins to cross the borders it will come in a rush and prices will collapse. Watch the charts carefully for signals because if the gush should come we could see summer cattle prices down into the middle to low 60’s.

ENERGY

Crude prices are holding on friendly DOE gas numbers. But don’t expect that to hold for long. As long as crude price is above 25/brl production will grow and I don’t care if supplies are reported accurately or not, everyone is going to be pumping oil and contract selling. Before very long that fact will come out and crude prices will be in the low 20’s or upper teens. Nearby natural gas should find support near 5.60.

SOFTS

Cocoa prices are falling fast which can only mean that authorities are in control of the rebels and trade is underway once again. Support is pretty strong around 1440, but the charts show vulnerability down to 1250. Coffee fell out of bed on news of ample supplies and better weather in the mountains of SA. It’s too early to discount freeze damage so I expect a rally to come back into play. This is a good environment to look for a two-bar reversal pattern. It’s subtle and may escape some traders notice. Demand for sugar has waned and price reflects that. Macro influences may take over before long, if commodity prices really are making the turn on a cyclical basis. Cotton is checking out price of the late March contract. There may be some more downside here but there shouldn’t be too much. A close below 50 on the nearby indicates a likely drop to 46. OJ is under pressure once again. There are no reasons for the lows not to hold, as there are no reasons for the highs not to be taken out this summer.

GRAINS

Corn purchasers are finding supplies after a rocky beginning to the planting and growing season. Odds favor a price decline along with improvement in the drought monitor. Along that line of reason beans should complete a head and shoulders top and decline into summer absent a dramatic change in weather pattern. Wheat is presenting a picture of "buy one day, sell the next." That shouldn’t last long and you should go with the breakout.

CONTACT ME: williamfrost@comcast.net or call 800 825 0109, code 04 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. Past performance is no assurance of future results.