FROSTY FUTURES JAN. 8, 2004

TECH DATA FOR FRIDAY JAN. 9.

DOW R=10700; 10750. S=10530; 10465; 10410.

SPX R=1135; 1160; 1175. S=1125; 1118; 1105.

NDX R=1531; 1545; 1550. S=1512; 1500; 1490.

MAR TBOND R=10922; 11008; 11024. S=10830; 10819; 10804.

FEB GOLD R=426; 429; 432. S=421; 417; 415.

MAR SILVER R=630; 634; 644. S=616; 605; 582.

MAR DOLLAR R=8625; 8655; 8700. S=8560; 8490; 8455.

MAR CRUDE R=3400; 3410; 3435. S=3340; 3315; 3280.

MAR NAT GAS R=710; 735; 780. S=675; 648; 580.

MAR BEANS R=800; 809; 835. S=785; 775; 765.

MAR WHEAT R=399; 409; 425. S=390; 387; 380.

COMMENTARY

INDICES

The three major indices (that I can measure with some degree of accuracy some of the time) are all near to fulfilling longterm targets, based on chart considerations. There has been a lot of talk by the TV pundits about this next round of earnings reports being bullish. Beware of the "buy the rumor-sell the fact" cliché. Those earmarking 11,000 on the Dow may be encouraging some "bag holders" to overstay. Maybe not.

INTEREST RATES

My last column was Dec. 12. At that time I suggested the bond market was range bound by 11100 –10700. Status quo. Follow the breakout for a move of the same proportion as the 4-point range. I remain bearish bonds. My target is par.

METALS

Gold is in consolidation pattern. Until currency markets give an indication of what to expect, that pattern should hold. Ditto silver, and to a lesser extent, copper.

CURRENCY

The dollar index is midrange between 8800-8400. As most of you know I have been bearish on the Dollar until just a day or two ago. I believe the index is near a bottom, for the time being. It could be that the strength of the economic recovery is enough to offset fear of a weak US government, relative to its tax base. If earnings are the least bit disappointing the Dollar should dive. If the current administration does not change some policies they are condemned to failure.

CATTLE

All rhetoric is useless, technical analysis is not useful during this period of time. Do what you think is right. Feeders may become hot property, but if the crop report Friday is bullish corn, then additional pressure will be added.

ENERGY

Crude continues to pressure shorts, even in the face of some OPEC countries announcing they do not want oil prices this high. Maybe just talk. Maybe more of a reflection of weak dollar. Talk of a cold winter, not just a passing cold front or two, also adds to strength. Natural gas is in a large flag pattern. If it blows through resistance a near-term target becomes 840 basis Feb or March.

SOFTS

If March cocoa can’t take out resistance at 1650 we should expect a drop back to test support near 1440. The May contract is close to March in price so if not sooner, perhaps later. Coffee is staining a new trading range bounded by 7050-6500. A rally through resistance brings 7500 into play. Even the weak Dollar doesn’t seem to be able to help sugar. Support at 565 may not be strong enough to prevent a test of 550. Overall trend in cotton remains up. Expect a test of 7800. Turns out OJ traders were watching a decline in demand based upon a low carb diet. OJ sweetness must be high carb. Well, cheap is cheap and OJ is cheap.

GRAIN

Check out the crop report Friday AM. Comments to follow.



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.