FROSTY FUTURES

THURSDAY APR. 30, 2004

TECH DATA FOR FRIDAY APR. 30.

DOW R=10360; 10410; 10480. S=10220; 10100; 10050.

SXP R=1122; 1129; 1133. S=1108; 1103; 1092.

NDX R=1445; 1462; 1470. S=1420; 1416; 1395.

USM R=10709; 10728; 10808. S=10609; 10526; 10516.

GCM R=389; 395; 399. S=383; 381; 376.

SIN R=600; 608; 620. S=575; 555; 550.

DXM R=9130; 9180; 9200. S=9055; 9015; 8960.

CLN R=3730; 3770; 3795. S=3540; 3615; 3535.

SN R=1018; 1030; 1050. S=985; 980; 965.

CN R=321; 325; 328. S=315; 312; 310.

WN R=392; 398; 403. S=384; 378; 375.

COMMENTARY

INDICES

While the Dow is still within the parameters of a 2% envelope, other technical indicators are warning of a decline measuring a target in the area of 10,050-10,000. SPX is targeting 1090 and NDX is targeting both 1395 and 1370. I can’t tell which is which because of volatility confusion. A Dow close back above 10,470 negates the warning of all three indices.

INTEREST RATE

A few of us made some money on short bond positions, but I, among the many, got out too soon. Re-establishing shorts is the next job. As I mentioned in the last outing on these pages, my target for the longbond is 87, but I’ll start liquidating around 92.

METALS

There is slop enough in the market for gold to try to get down into support near 370. Talk about China’s economy becoming too hot and leadership withdrawing bids from world’s commodity markets forcing down prices of various raws is countered by conspiracy theorists that the battle between large world dealers and large speculators was won, this round, by the dealers. Seems the dealers are in cahoots with one another and decided to drop a bomb on the poor speculators who got caught in a vacuum. Everyone has an opinion…. Where silver and copper, et al may find support is wait and see. I provide numbers for you on gold and silver that I recommend you check daily.

CURRENCY

The Dollar remains in an uptrend, the technical target remains 9400. Things looked pretty bleak back when I mentioned to you a bottom in the buck was at hand, for the time being. It will be interesting to see if the Index can complete a mere 25% correction of the major downtrend. If it can’t then more weakness in the Greenback is to be expected along with a resumption of the uptrend in metals.

CATTLE

Who’da’thunk we’d ever see June cattle at 8100? Be that as it may, I suggest selling into rallies rather than worrying about the discount of futures to cash. Naturally, use stops, but in August price should be about 10% lower. I am looking for a place to sell feeders also. This explosion in price is a classic post-bull market blow-off top.

ENERGY

Technical’s indicate the bull market in energy is alive and well. Common sense tells me it’s a bull trap. Don’t’ fight the tape, but if you are a speculator and contrarian, a few Dec put options might pay off very well. I suggest looking at the Dec crude 28’s near 50 points risking the premium.



SOFTS

Cocoa may run into more selling as it approaches resistance in the 1440 area. Support near 1385 looks strong. Trend in coffee remains negative with support near 6900 (liable to be broken) and resistance at 7200. Downside target is near 6700. Sugar appears to be getting setup for a sell-off. Big resistance at 710 and 725, so use stops in case it’s a fake. Cotton pundits couch terms solely on valuations of cotton to the Chinese. Maybe that’s good, but technical’s indicate a purchase is warranted near current low’s. A failure at week’s end reverses the tech picture from positive to negative so don’t bust through the gates. That would be a close below 5750 July.

GRAINS

July Beans are poised to cross over a bullish indicator, which could imply another leg up. However, failure near the 1020 level could begin a downtrend with a target near 890. July corn has retraced about 50% of its drop from the high but the trend remains down for the time being. A close above 335 brings that trend into question. Trend in July wheat remains down. But a strong close this afternoon gives some pause to the confidence of bears. A week’s end close above 392 should cause some shorts to vacate. An opportunity may arise to sell again on a rally near 410.

NOTE

As you may have noticed I have not published a commentary for the past few weeks. Markets in transition do funny things. At the best of times, analysis is "iffy" and commentary merely a reflection of the cliché "often wrong, but never in doubt." During market transitions, analysis is questionable at best and commentary runs to the ridiculous. I hope things are becoming more stable now, hence the resurrection of the commentary. It is offered with all humility.



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.