FROSTY FUTURES OCT. 30, 2003

TECH DATA FOR FRIDAY.

DOW R=9840; 9950. S=9750; 9725; 9675. (LOOK FOR A SURPRISE, UP).

SPX R=150; 1053; 1056. S=1044; 1038; 1032.

NDX R=1433; 1440. S=1413; 1408; 1385.

USZ R=10822. S=10704; 10628; 10612.

GCZ R=389; 392; 393. S=382; 380; 375.

SIZ R=518; 521. S=511; 506; 499.

DXZ R=9255; 9315; 9325. S=9205; 9190; 9150.

CLZ R=2875; 2900; 2955. S=2825; 2785; 2725.

SX R=802; 811; 819. S=789; 780; 770.

WZ R=376; 378; 384. S=367; 364; 344.

COMMENTARY

INDICES

The Dow (and the other indices) by rights should go down. But the formations are nondeterminate and therefore I will not forecast a downtrend intact. Tomorrow is Friday, the last day of the month. There are a lot of statistical fliers that can influence cash flow.

INTEREST RATES

I target a Dec or March tbond price near 10328. Sell into rallies, watch tech data daily for resistance areas to use as a guide. We should get a bounce off support at 10616.

METALS

For now we should expect gold to trade in the area between 375-395. Below 375 good support exists –near 370. Above 395 the target becomes 425. Silver is in consolidation between 500-525. My guess is that the 500 area holds (give or take 10-15-cents) followed by a close above 535. At that point the next level is 600. And when will copper stop going up? Who knows? Production has been curtailed at the same time demand from China and India is exploding. My customers who insist on being short copper are losing their butts.

CURRENCY

The Dollar is in consolidation, undoubtedly being supported for the time being by central bank intervention. Unless there comes a way for the middle-class of America to make more money and pay more taxes the buck is headed into the 80’s. And I will tell you something else now also. You watch the number of middle-class American’s who tell the US government to kiss their ass. These folks will leave for Canada, Australia and New Zealand. Patriotism is found when leaders and their ideas are worth fighting for. As it stands now, international capitalists own the political leaders of America and what they want are cheap labor, big profits and conspicuous wealth. Now that’s something the middle class is sure going to fight for, or is it?

CATTLE

Probably topped out. Big swings, option premiums high again. Feeders now under a little pressure as corn and meal prices rise.

ENERGY

Crude has broken support. The next downside target is 2650 Dec. Be aware that beginning Monday, TECH DATA will be quoting the Jan contract, not Dec. All of a sudden natural gas seems plentiful. What happened to Greenspan’s warning about insufficient supply to meet coming demand? I think he is a macro-economist, not into day to day figures. So in the language of old, successful investors, buy when the crowd is selling.

SOFTS

Something to think about relative to cocoa and political unrest that stimulated price hikes in the past. Supply is still there. At what price will cocoa move and how long will it take to move it? Watch the charts. Expect spikes into the 1550 area to be met with heavy selling. What is the downside? Maybe 1000? If so, coffee won’t be very far behind. Support will be found near 5850 and 5600. Sugar has built a platform of support at 610. If that level breaks, support below that at 585 may hold. If that gives way then the next downside target becomes 520. Cotton suffered a reversal today, but not a key reversal. The bearish engulfing line presented indicates a correction of significant proportion, but not the end of the bull market. A good first stop is 7250 basis Dec. Buy call options in the March OJ contract, and buy more every 200 points down on. Do not overload yourself. But look at it this way. If South America can come up with a 60-million tonne bean crop and our beans can still hit 8-bucks, then South America can come up with tonnes of OJ and our price will still get to a buck-and-a-quarter.

GRAINS

Tell me when China and India stop importing (buying on the float) beans and I will tell you the top of the market. Absent that, as long as the Dollar continues to decline bean price will rise. Corn and wheat will follow in a ragged volatile way that will make it difficult to trade.

CONTACT ME: williamfrost@comcast.net or call 615 331 9567.

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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.