FROSTY FUTURES

JUNE 10, 2005

INDICES

It will probably be Tuesday the 14th before market news of sufficient importance to move markets is released. IF the numbers are fuzzy don’t be in too much of a hurry to react or you may get caught in a reversal. There is always the likelihood of traders going after stops at either extreme of the current patterns. On the other hand, if the early numbers are clearly bullish or bearish, then go with it as quickly as possible.

LONGBOND

A top appears to be in, as forecast here. The first target is 11701, the 25% retracement level of the upmove. Below that the next target is a co-incidental level at the .382 retracement point that coincides with horizontal support near the same number, 11523-11520.

DOLLAR INDEX

New highs are what they are. A trend is established. The caveat comes into play with the overbought condition of relative strength. Support should be strong at 8772-8735. Be aware of the forthcoming roll from the June contract to the Sep.

METALS

Gold was contrarian this week as the Dollar strengthened and silver weakened. With two indicators to one I lean toward gold weakening next week. But if the bugs spot something new stimulating inflation; I mean, what can be new after $50+ oil, then the lower bond price will combine with higher gold price and that ailment will take the forefront and silver will follow gold higher as the dollar rallies because of more competitive rates.

CATTLE

Fats are on the bottom of the range again slipping on the slope of slack demand and higher weights. Supermarkets are coming out with summer sales that are no bargain, even at two for one. I look for the June contract to test 8200 and August to test the gap at 8075. Be long feeders at your own risk, or you can take a look at some out of the money puts and give that a try. It’s only money.

ENERGY

Tropical storm Arlene (?) threw a little buying power into the energy pit this week but critical resistance levels held and markets even reversed from those levels. A June contract close above 5470 is bullish and places the next level of resistance near 5763 within reach, although not easy reach.

SOFTS

Nothing in the stars to indicate a broadening of the trading range in coffee. Support near 110-109 should be strong enough to hold, but two closes below that level indicates a move to 106. Resistance is now strong near 123. Sugar remains in consolidation with a 920 target remaining intact. Cotton should find support very close to current lows. RSI readings are oversold, the trend is getting mature, be prepared for short covering or big buying coming into play if the manufacturing numbers, for example, come in bullish. OJ is building a head of steam for a run to old highs. The original target of 105-110 remains in place. There may be good demand for lumber contracts near 325. Watch that level, and if volume picks up and price goes up join the fun.

GRAINS

Beans are now in a trading range bounded by 690-640. It’s late spring so it’s all weather. July corn should pick up support near 206 and rallies should be capped next week no higher than 222. Wheat is reflecting some harvest pressure. Rains in Kansas couldn’t have helped that crop. Stay with the original strategy of being long 3 July 330 calls and short one futures contract of at a higher level, long 3 July 340 calls and short one July futures contract. You are still in the game.

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 just that. Nothing herein should be construed to be a solicitation to trade futures or options. Hedgers should have a defined plan.