FROSTY FUTURES

THURSDAY April 1, 2004.


TECH DATA FOR FRIDAY, APR. 2.


DOW R=10390; 10425; 10475. S=10345; 10300; 10210.


SPX R=1135; 1144; 1152. S=1126; 1120; 1114.


NDX R=1458; 1465; 1480. S=1444; 1438; 1430.


JUN TBOND R=11402; 11412; 11426. S=11304; 11200; 11116.


JUN GOLD R=429; 433; 434. S=425; 423; 418.


MAY SILVER R=821; 830; 840. S=800; 777; 760.


JUN DOLLAR R=8785; 8815; 8840. S=8730; 8710; 8620.


JLY BEANS R=1030; 1040; 1055. S=1010; 998; 975.


JLY CORN R=338; 342; 345. S=327; 322; 317.


JLY WHEAT R=421; 425; 427. S=412; 402; 393.


COMMENTARY


INDICES

Index daily charts look good. Resistance is being eaten away a day at a time, continually climbing that "wall of worry." Proof of that theory will be validated should price pull back to Dow support near 10300 and buyers come in with the vigor of young bulls running into a field full of heifers. Remember the old bulls’ walk (they will cover them all) as the youngsters run (they will "get some"). That bit of country philosophy offered because price is near important resistance and some young bulls may lose their sack if they get in too much of a hurry. As I write this, I have on TV the Kudlow and Cramer Show. The boys are just manic. So, be patient but decisive. Follow daily TECH DATA for support and resistance areas.


INTEREST RATE

The near term target for June Tbond contract is 11216. The problem with that level is that there is not much support at that point. There is good support at 11300 and below that at 11200. So, expect some sloppy trading around that tech target.


METALS

June gold has a tech target of 442. Silver is now just barely reaching the overbought level. Crosscurrents from currency fronts and energy prices can have a ripple effect on metals.


CURRENCY

My theory the Dollar is building a base to rally into the 9300-9400 level is under stress. My confidence level would be much higher had support at 8800 held. With today’s weakness I have to check my hole card and pass on to you that my hold on that theory will release upon a close on the June Dollar Index below 8710. If that level holds, however, I recommend doubling up on your long positions.


ENERGY

Simply put, near term target on May crude is 3150. Those of you who followed my suggestion to sell crude every fifty-cents up or down can send me checks. Two or three per cent of your profits would be a fine gesture. JUST KIDDING. To repeat the theory, I believe that energy battle is one between Titan’s. Producers have had the opportunity to hedge production on every major futures market around the world several years ahead. Speculators are holding a massive long position. Try as they might to support their positions, when those futures contracts reach delivery date and oil begins to hit the debarkation ports supply is going to swamp the pits. AND CRASH!!! My own educated guess is that within the next year or so the price of crude will be testing $10.00/brl. And now OPEC is jawboning about a cutback in production and the speculator’s just eat it up and get more and more long. IDIOTS.


SOFTS

Cocoa is reaching into resistance near 1580 May. Support should hold on minor setbacks as funds support. Support should be strong near 1500. May coffee is trying to gain support for a run to 7575-7600. Good support just above 7300 is being developed. Sugar wiped out gains held by small speculators. But important support held above 600 basis May. A recheck of that level should be forthcoming. If it holds, enter the market from the long side with buy stops. There is good support for May cotton at 6000, but I suspect intelligent traders from China will not rush in where wise men fear to tread. But between 5500-5200 I’ll bet they make some very good purchases.


GRAINS

Bean harvest is making headway and is apparently offset by excellent demand. The double top on nearby contracts is a warning, but not necessarily implying dogma. Corn is playing catch up and to reach an average ratio to beans has to go above 4.00 based upon current bean price. An upside breakout in Chicago wheat targets 450. Failure should find support down around 375.


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.