FROSTY FUTURES

THURSDAY MARCH 25, 2004


TECH DATA FOR FRIDAY MAR. 26.

DOW R=10240; 10330; 10450. S=10160; 10110; 10005.

SPX R=1112; 1127; 1135. S=1104; 1096; 1092.

NDX R=1432; 1450; 1463. S=1412; 1402; 1394.

JUN TBOND R=11524; 11612; 11616. S=11510; 11500; 11416.

JUN GOLD R=420; 422; 425. S=416; 414; 412.

MAY SILVER R=765; 776; 785. S=746; 728; 720.

JUN DOLLAR R=8960; 900; 9065. S=8995; 8855; 8832.

JUN CRUDE R=3570; 3620; 3670. S=3450; 3420; 3380.

JLY BEANS R=1032; 1040; 1058. S=1008; 992; 978.

JLY CORN R=317; 321; 325. S=307; 305; 302.

JLY WHEAT R=417; 424; 427. S=408; 402; 395.



COMMENTARY

INDICES

Odds are high that the Dow has hit bottom this week and will be on an upward path. A close above 10350 indicates a new target near 10500-10600. The caveat to technical indicators is the political currents now extant. One indication of market strength will be how the market reacts to the Dem’s next attack on President Bush. As it now stands, with Zell Miller from GA announcing his support for Bush, our Pres is on a good trail for the time being, and collaterally, so are the markets. Follow TECH DATA for daily support and resistance levels.

INTEREST RATE

The longbond (30-yr.) is in a tight trading range in front of economic news due out tomorrow morning. The current pattern indicates either a rally up to 11816 or a drop down to 11216 basis the June contract.

METALS

Gold and silver have reached a temporary pinnacle. Topping energy price, signs of strength in the Dollar and the Bush political attack on Kerry are combining to reduce high anxiety. The lower the anxiety factor the lower precious metals prices. What kind of correction might we expect? My guess is a substantial one based upon the strength of the Dollar in the near term.

CURRENCY

The Dollar Index is near important resistance. A close on the June contract above 8960 allows for an attack on 9000, which, in turn, establishes a near term target of 9200. As I have stated often the past four weeks, I believe the Dollar is building up for a rally back to 9300-9400 to fulfill a 25% retracement of the drop from the 12100 high. If I am correct in this thesis then gold and silver will break a relative amount in conjunction with the rally in our currency.

CATTLE

Maybe it’s time for more producers to switch to Kobe beef. That delicacy reached a price of $100.00 a pound and is called "white beef." Instructions and seed stock are available. As far as our US popular #2 Oakies are concerned price range appears to be stuck, in the near term, between 8300 and 7300. Summer prices are well discounted but historically high. I don’t know if things will open up vis a vie exports, but if they do, short positions in June and August contracts will be profitable come hot weather. Cattle traders are at risk with prices as high as they are. This market, like Pork Bellies, can lock limit and stay that way for several days, just in case you forgot.

ENERGY

Supplies are becoming more visible and now OPEC is jawboning tightening supply this summer. I think it’s too late. The domestic strategic reserve is all but full, price has been high for too long, and open interest is huge. Keep in mind that oil-producing countries can sell crude on every commodity exchange in the world, not just the US market. So they sell futures at 35-38 per barrel and then produce the hell out of it and price collapse. I have told you before to beware, one of the biggest bull traps in history is being set. Those of you well fixed can sell crude every 50-cents up and every 50-cents down. Those of you are not so fortunate can buy put options as far out as feasible. If you need help, call an experienced broker. Like me. C/# below.

SOFTS

Cocoa remains in a downtrend. Trade the envelope. Coffee has formed an island top on daily charts so don’t be surprised by a test of 6800 basis May. In sugar, the commercial began to sell and the spec’s stood back and let price fall. Wait for a pattern to develop that you can recognize and go with it. Cotton is in a corrective mode and the current downside target is 62-cents basis the May contract.

GRAINS

The port strike is over in Paranagua, SA. So ships are being loaded and the 60-odd miles of backed up grain traffic is beginning to move. Good domestic export numbers supported bean prices on the CBOT but strength should be suspect with the Brazilian, Argentine crop coming to market, and hedgers becoming more active. Funds and locals have been willing to come into the buy side but chances are they will break if they think prices will fall substantially under the pressure of hedgers. They, and the rest of the world, remain very bullish feed and food grains based on would carryout numbers. Question remains, how low will price go before the strongest guys come in and buy everything? No one wants to be left out of the biggest bull grain market in 15-odd years. And news that beans traded in China at US equivalent of $13.00/bu has traders fired up.



CONTACT ME: williamfrost@comcast.net or call 615 331 8567.

TO SUBSCRIBE: www.frostyfutures.com.

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.