FROSTY FUTURES THURSDAY FEB. 19, 2004

TECH DATA FOR FRIDAY

DOW R=10755; 10790; 10825. S=10660; 10600; 10580.

SPX R=1159; 1164; 1172. S=1145; 1142; 1137.

NDX R=1512; 1524; 1535. S=1485; 1478; 1470.

MAR TBOND R=11304; 11312; 11320. S=11222; 11213; 11204.

APR GOLD R=413; 418; 422. S=408; 406; 403.

MAY SILVER R=676; 680; 687. S=657; 649; 640.

MAR DOLLAR R=8650; 8710; 8815. S=8590; 8540; 8520.

APR CRUDE R=3480; 3525; 3575. S=3400; 3330; 3280.

JUNE LIVE CATTLE R=7060; 7090; 7160. S=6950; 6870.

JULY BEANS R=860; 867; 875. S=844; 832; 820.

JULY CORN R=295; 298; 300. S=292; 288; 286.

MAY WHEAT R=382; 387; 393.

COMMENTARY

INDICES

Triple witching Friday deserves some extra leeway. So, beyond the support/resistance given in TECH DATA above, I’ll add that a bullish economy and increased volatility may propel the Dow into 11,000. There is no "other hand" as it either will happen sooner or later. If later, then check out support levels for downside targets. It is not rocket science.

BONDS

The daily charts are not reflecting the bearishness I feel. I have been off by 2-points, so far. Remember I sold the March 112 calls for 42/64 expecting to keep the premium. As it now stands it looks like I might be assigned a short March bond future at a price of 11221. I am not too concerned by that, but there is the fact that by making this choice I might be committed to adding to my short position for a couple more points on the upside. The monthly chart appears to have the potential to develop into a head and shoulders top. The neckline is down near the 100-month MA near 106 and a target of 9800.

METALS

Gold and silver are stuttering near the high end of recent ranges as copper goes through its blow off topping cycle. If inflation numbers are higher than anticipated by money managers then we should see a resumption of the bull trend in gold and silver and probably profit taking in copper.

DOLLAR

Intervention never works for long in currencies. You can’t stop the tide. What is visible to central banks, the US Treasury and the leaders of the world’s largest corporations is not visible to us, for the moment. It could be there is nothing there to look at and that this indecision in currency markets is only reflective of distraction as these money managers look at oil markets, blue sky in stock prices, employment shifts and politics. After all, what would you do if you were in that position?

CATTLE

Things are beginning to calm down, chartwise. So if you are inclined to trade cattle wait for the markets to breakout of current consolidation patterns and go with the flow.

ENERGY

March crude almost got to 3600 today. Charts from eSignal are just a little confusing because the continuation chart is not reflecting the March contract as the continuation chart leader. So, this spike is not visible on continuation charts. That may be resolved, but make sure your software provider isn’t throwing you a curve like eSignal. Be that as it may, Jim Steele seems confident that oil price will not stay this high much longer. As for me, I will wait for the break and get stopped into a short trade rather than picking a top. Heating oil stocks declined on the API and DOE reports today. With spring coming, you might look for a chart pattern to indicate a top and go with that. Unleaded stocks were also lower but couldn’t make new highs to hold.

SOFTS

Cocoa is near the low end of the last 9 months’ trade range. A break of 1450 stimulates trade to try to test 1380. Indecision in coffee pits indicates lower price. I expect a test of 7000. In sugar, COT said it all, pretty much, with large specs getting short and small specs getting long. I think the upside is near 600-650 tops but the downside is near 450. China is back on the cotton board so it is probably prudent to buy breaks. You might expect a rally back into overhead at 7050 or so.

GRAINS

It’s not even spring yet and beans are buying acreage commitments already. Fundamentals remain strong for corn, but wheat is a follower. It just makes sense to be careful with March or May beans near 900. But I will mention this to you. Just as, years ago, leaders who were "inside" the major brokerage firms foretold us of volume days in stocks into the hundreds of millions and even billions of shares per day. Those same types have said for years that demand for beans would be such that bean price would be in the teen’s just because of demand, no bad weather in the equation. Don’t get stupid.

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.