FROSTY FUTURES

THURSDAY APRIL 8, 2004


TECH DATA FOR MONDAY APRIL 12.

DOW R=10500; 10560; 10590. S=10375; 10340; 10300.

SPX R=1145; 1149; 1152. S=1135; 1127; 1120.

NDX R=1496; 1499; 1515. S=1475; 1470; 1465.

JUN TBOND R=11020; 11031; 11120. S=10927; 10900; 10816.

JUN GOLD R=425; 428; 432. S=419; 416; 413.

MAY SILVER R=829; 850. S=795; 778; 760.

JUN DOLLAR R=8940; 8955; 8980. S=8885; 8850; 8800.

JUN CRUDE R=3690; 3740; 3775. S=3555; 3440; 3410.

JLY BEANS R=1014; 1029; 1043. S=986; 978 973.

JLY CORN R=343; 348. S=333; 331; 328.

JLY WHEAT R=425; 427; 431. S=416; 413; 411.



COMMENTARY

INDICES

Support for the Dow index is near 10375-10340. Pre-holiday trade left the market vulnerable to testing the mentioned support and resistance lays at a solid close, or two, above 10575. My belief, rationalizing the selloff this week, is the vulnerability of Pres. Bush. Even though Kerry has not made much of a show lately, the renewed resistance in Iraq and testimony by Dr. Rice did little to support the President’s position on Iraq expenditures and loss of life by our troops. He could, at any time, offer what I consider to be the legitimate reason for committing troops to Iraq, i.e., the opportunity to insert a Republican form of Democracy in the heart of the Arab world, begin a dialogue with Israel and split the heart of repressive governments in the region. If he has, as some in the administration will insist, he hasn’t been very vocal about it. All I have heard is about weapons of mass destruction (none found) and terrorist activity ( what you do if Iraq, or any other country invaded us?) It could be that all Kerry has to do to win is keep his mouth shut and let the Republicans hang themselves. Idiots.

INTEREST RATES

"Fully discounted" say floor traders on the CBOT when asked what they think the Fed’s next move and the reaction to that move will be. We may see consolidation for another week or tow or even three, but don’t bet the farm on it. The printing presses are working full time as money supply grows. Huge deficits, monetizing debt and an aging Fed governor don’t bode well for bondholders. Downside target on the longbond-8700.

METALS

Price range, even daily, on gold and silver is too volatile to get stubborn when trading. But there is no doubt in my mind that long positions should be established in both metals on setbacks. What the upside targets may become are unknown because we don’t know the next administration’s reaction to the problem. But as things stand now I believe there will be at least one year of inflation approaching double digits. So for now I would establish tentatively, targets on gold near 470 and silver near 1080. Copper may continue to be a little out of step as mines increase production.

CURRENCY

I remain bullish the Dollar, in spite of the aforementioned problematic scenario. We will see what happens after the buck fulfills the technical mandate to test resistance in the low 9000’s.

ENERGY

Profits in this arena vanished as DOE’s and API"s numbers were insufficient on supply side to overcome fear. It’s wait and see.

SOFTS

Cocoa found some shorts covering ahead of the long weekend. Coffee remains vulnerable to a test of 7300. Sugar is on a tear and should remain strong as the momentum is gaining. Cotton is consolidating but I think price has to decline to get China back in a big way.

GRAINS

Talk about cross currents! Great demand, waning supply, inflationary outlook, what could be more bullish Who knows, maybe wheat will catch up.



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.