FROSTY FUTURES AUGUST 14, 2003
TECH DATA FOR FRIDAY AUG. 15.
DOW R=9360; 9474. S=9285; 9209; 9148.
SPX R=990; 995; 999. S=987; 980; 974.
NDX R=1254; 1264; 1278. S=1244; 1226; 1220.
USU R=10612; 10728; 10808. S=10415; 10326; 10307.
GCZ R=370; 372; 376. S=364; 361; 357.
SIZ R=510; 513; 520. S=501; 493; 487.
DXU R=9700; 9725; 9750. S=9660; 9625; 9600.
CLV R=345; 3195. S=3065; 3005; 2960.
SX R=554; 558; 562. S=543; 539; 533.
WZ R=385; 388. S=377; 372; 367.
COMMENTARY
INDICES
For the eleventh week the Dow has maintained a range between 8850 and 9400. So
when this range finally becomes history we should expect a target, either up
or down, of about 550 points. History being what it is, and my own bullish
bias being what it is, I would expect a penetration of support to wipe out
weak-handed money and then a resumption of the rally. SPX and NDX, have the
same, albeit more volatile, type of range.
INTEREST RATES
Tbond charts are worth studying. On your daily charts draw a downtrend line
across the top of the downtrend. Then make a parallel line from the low
beginning Friday the first week in June and connect it to the low on Friday
the first of August. Now divide that line with another parallel line right
down the center of the previous two. Note how much more action has taken place
in the upper half of this "envelope." I think this is about to change as the
market blows in a bottom near the 10216 level, due, I expect next week.
METALS
Gold ran into some resistance today but recovered before closing. The trend
remains up. Should Dec close above 376 momentum is expected to increase.
Silver is doing the two-step. Step one was a range between 505-525, step two
has been between 510-484. History presents evidence that a break to new lows
should be expected, but, we can’t just look back. So I will project that if
resistance, now at 510 can be taken out then new highs will be forthcoming.
Oh, and that with the caveat that locals might go after the stops near 510 and
reverse. High grade copper’s ability to hold, on a closing basis, above 7900
gives this chart a bullish tint.
CURRENCY
I believe that coincidental with a rallying stock market will be a rising
Dollar Index. The double top on weekly and daily charts near 9775
notwithstanding, the power gridlock taking place in the Northeast, and a
declining middle class in America are all bearish our currency. But "the
powers that be" aren’t in the equation and as long as business continues to
recover then the Dollar will regain strength until another economy becomes
stronger faster and then that currency will outstrip ours.
CATTLE
Looking forward to the April contract, as long as the close remains above 7590
cattle will remain in a bullish configuration. Should that level be breached
any producers who have not hedged will have missed their opportunity for the
year. Feeders are maintaining a bullish bias, but, watch what happens if the
April live contract fails at the 7590 level. Down!!!
ENERGY
Crude oil is coming out of Iraq, now at about a rate of 400,000 barrels per
day, and soon to increase. Prices are dropping but are supported on the days
lows by some force. I don’t know if these are commercial hedgers or large
speculators. We will see on the next COT/options report. My personal target
for crude over the next several weeks, or few months is $23.00/brl. Natural
gas might come down to test 4.20 just to befuddle traders and Mr. Greenspan.
If it does, I suggest you get long, whichever way you can. You might expect
this in the next month or so. Just keep your monitor on a warning signal based
on price to let you know if it happens. And if you are reading this and not a
subscriber or client I might suggest opening your account and get ready to
make the hit of a lifetime.
SOFTS
Cocoa remains in a base building formation. Coffee closed weak and looks ready
to retest lows. Try sugar from the long side with stops below today’s lows.
Cotton should hold as long as 5465 Oct holds. If that breaks then 5350 is
next. Buy Jan OJ, be ready to risk to new contract lows, then be ready to do
it again. When traders put the freeze premium in sell futures to pay for calls
and ride the winter out in the position to sell futures against long calls.
Lumber ran into some selling near the 300 level. Support near 263 is strong.
GRAINS
Dec corn is in a bullish setup as long as a Dec close below 228 is avoided.
That’s where a lot of stops are. RE beans, it’s the same deal. A close below
538.5 stimulates sales from the funds. But it will take a close below Dec 350
to convince wheat traders the bull run is over.
CONTACT ME: williamfrost@comcast.net
or call 615 331 8567.
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.
