FROSTY FUTURES DEC 4, 2003
TECH DATA FOR FRIDAY DEC. 4.
FRIDAY DEC. 5.
DOW R=9943; 9987; 10,042. S=9890; 9850; 9790.
SPX R=1071; 1075; 1085. S=1066; 1063; 1058.
NDX R=14435; 1442; 1450. S=1419; 1411; 1400.
MAR TBOND R=10723; 10814; 10820. S=10708; 10626; 10614.
FEB GOLD R=406; 413. S=401; 398; 393.
MAR SILVER R=549; 552; 558. S=538; 532; 524.
MAR DOLLAR R=9050; 9090; 9125. S=8970; 8930; 8880.
FEB CRUDE R=3145; 3160; 3225. S=3095; 3030; 2980.
FEB NAT GAS R=648; 660; 674. S=603; 580; 570.
MAR BEANS R=773; 778; 784. S=763; 756; 752.
MAR WHEAT R=416; 419; 422. S=406; 399; 394.
COMMENTARY
INDICES
The Dow is too close to 10k not to make the attempt before the end of the
year. So says some experts and I have no reason to argue. Weakness in NASDAQ
Composite faked some traders into believing the Dow was doomed to drop. It did
for a few minutes.
INTEREST RATES
Anything can happen on any given day. Follow Tech Data daily for day to day
support and resistance levels. But keep the big picture in focus. The US has
huge debt now. And there is no sign of it getting any smaller anytime soon.
Eventually the government will have to monetize that debt and that means
higher inflation, higher rates ergo lower bond prices. Is it too soon to begin
a strategy of selling into rallies? The flat answer is "NO." I think the March
bond will hit par (100). I hoped (as I mentioned a couple weeks ago to you) to
sell the bonds near 112, but the rally failed. That convinced me it’s time to
establish shorts. Yes Virginia, use stops. Santa is hard to find on the floor
of the Board of Trade.
METALS
So if you go along with the above on bonds, you should be looking for spots to
get long gold and silver. Basis Feb gold there lies a good strong base around
392, if we should be so fortunate. March silver has good support near 525.
March copper is supported between 9200 and 8900.
ENERGY
Crude is back on the upswing. Let it get up there and then sell into it. I
don’t know what to do with natural gas now. I have told you for weeks to get
long. It exploded today. I took some profits and even did some vertical put
spreads looking for a correction off the highs. But I’m not looking for much
and I will use a pullback to get long again. Take it day to day.
CATTLE
I don’t have a thing to add to Hightower. The top appears to be in, but I
still expect to see high prices this spring. Not as high as they have been,
because, as I said, I think the top is in. But I would be surprised to see
spring prices below 75 on the charts. Hedgers would be wise to protect
themselves against such an event. When the embargo is lifted, cattle could
come at an amazing rate. And that would be just the surprise breaking the
market down. If you decide to trade feeders expect the unexpected. It’s a thin
market and the locals will pick your pockets.
SOFTS
Coffee is in the middle of a lot of chop. Cocoa is near some important
resistance. Sugar should be able to complete a test of 700-740. Good momentum
is a strong signal. Cotton is putting on the face of a consolidation. After a
good correction of a big move cotton has rallied back into some resistance
area and is awaiting some news to propel it one way or another. Fundamentals
remain bullish, the Dollar is cheap and our cotton is very competitive on
world markets. Orange juice, after a year of trending lower, should be at the
lows. Good support exists near 67 on spot month with resistance up near 73.
Normally by this time of year the market would have priced in a freeze premium
and as time progressed price would decline absent a damaging freeze. This
year, perhaps because of good supplies domestically and in Brazil, that has
not been the case. I think the commercials and funds are short, check the
commitments of traders to verify that, so we will see a substantial short
covering rally. Should that happen when a freeze actually takes place that
rally will be exaggerated.
GRAINS
Expect some corrective action to take place in grains this week. Profits may
be taken on bull spreads that have been so popular the past several weeks.
CONTACT ME: williamfrost@comcast.net
or call 615 331 8567.
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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.
