FROSTY FUTURES
MARCH 3, 2005

Divergence is a key word looking at the differences in charts showing price activity in the Dow 30 and General Electric. Other large cap stocks also show similar divergence. The Index is near a top. It won't hurt to wait a week or so to find out if the large caps will pull the index down, or if the other stocks will pull the big caps up.

Orange juice is nearing a break point, one way or another. I have been bullish OJ since the hurricane season. It's been a volatile ride but I hold to my bullish bias with a target near 110-115.

Lumber is pulling back, look for bottoming patterns to develop, not necessarily on the front month. May and July should show bullish developments. July and Sep call options should be the better play.
Targets are above $500.

I remain bearish the Dollar. But can see consolidation taking place. This edition of JOURNAL OF FOREIGN AFFAIRS has some good reading about US hegemony. Worth the price of a ticket to read. Thesis is that the US is strong enough to maintain its hegemony even with a weaker currency. But then I intimated that to you months ago. Glad to see the intellectuals are catching on.

Shall we see if I can be wrong again on crude???? Sell it as it attempts to reach 60/brl. Better use puts, or even vertical put spreads. If you don't know what that is, don't do it. If you want to know, call or email me.

The softs are an interesting lot. Sugar could be on a tear to the upside in the near future. Coffee is much higher than I ever expected it to be and could go a lot higher. Cocoa is near resistance, which means nada.

Everyone has something to say about grains. Demand is great, wheat acreage is down, subsoil moisture is OK in the mid US. Top soil moisture is mixed. Question should be is the seasonal "spring" rally kaput?

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