FROSTY FUTURES JUNE 5, 2003

TECH DATA FOR FRIDAY JUNE 6.

DOW R=9060; 9078. S=8960; 8900; 8850.

SPX R=990; 1005. S=979; 970; 965.

NDX R=1255; 1270; 1290; 1310. S=1215; 1206; 1196; 1180.

USQ R=11926; 12001; 12014. S=11826; 11808; 11726.

GCQ R=371; 374; 382. S=364; 361; 358.

SIN R=455; 465. S=448; 442.

DXM R=9325; 9410. S=9235; 9210; 9050.

CLQ R=2980; 3025. S=2925; 2855; 2810; 2735.

SN R=623; 634. S=615; 610; 595.

WN R=324; 329; 335. S=316; 311; 308.

INDICES

The first thing that comes to mind is the possibility of the Dow overshooting resistance at the 9000 level and squeezing shorts. There is a lot of glee among market pundits and analysts alike. Maybe with good cause, but I would watch resistance levels as per "Tech Data" and be sensitive to signals of weakness. The reason I say this is because the market is still fragile and being supported by "fast money" not necessarily "smart money." I am still holding long GE and RD but have not added to core holdings as of yet. NDQ still remains the leader with the SPX a not too distant second. But I remind you this is more a function of volatility rather than value.

INTEREST RATES

Tbonds remain in consolidation between 117-121 with a possible double top forming on the weekly chart near the 121 level. Buy puts, risk a new high, maybe for two or three consecutive closes. There are too many pundits telling folks to "get long the bond market." They are fools guiding idiots. Don’t buy into it.

METALS

Gold is in a consolidation pattern that looks, to me, like it wants to work its way higher. Good targets are 375 and 389. Then we will see what happens. On the support side, the strongest level is 357-358. Copper is near pretty stiff resistance as it nears 80. A close below 77.5 would be a strong signal of failure. A weekly close above 80 should bring support up to the 75-74 level.

CURRENCY

The Buck continues to slide, the Yen continues to slide and it appears a race to see which of the two can slide the fastest. The only way we will see an end is to see the end by a confirmation signal that holds on retest.

CATTLE

Seasonal pressures appear to be overtaking recent fundamentals expressed by a lack of follow-through to the upside. Support on the now spot June contract is near 7100 but it will take a close below 7300 to really bring that target in focus. Feeders certainly seem to be suffering a reversal. Sell both.

ENERGY

Crude is stifling bearish sentiments with a rally. While I do stand by my contention that crude price will begin to fall dramatically in the near future, I have no control over the purchasers who seem to feel they must have immediate delivery. I may have to take a loss on my July contracts and roll to Aug, Sep and Nov. One thing we should watch for is the difference in price relative to spreads between the nearby contracts and the deferred. The nearby needn’t necessarily rise if the deferred contracts fall. This phase of the "contango" is not talked about very much in the media, but it is something I will tell you is very important to watch.

GRAINS

After a nice spring rally the weather has improved and prices are headed back down discounting a good crop. Sell rallies.

SOFTS

There will be a number of large traders who will remove short cocoa positions here. That is no assurance of anyone establishing any important longs. Sell rallies. If coffee continues its winter decline it should pick up good support near 56-54. At that point sell some puts and buy some calls to help pay for them. Go easy on the futures contracts because the locals can get whippy with prices. Play sugar for a drop down into the 610-560 area. Cotton found support at the 48 level. This should be the beginning of a bottom formation that will reflect, on the downside, weakness in stocks (read the economy) and on the upside a continuation of the bull run in equities. Whether OJ has built a base or is consolidating for another drop I don’t know. But if the local crowd manipulate prices down into the low 70’s, sell the kids, the wife, the husband and the farm and get long OJ. (Just kidding about the kids).

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.