In this episode of Tech Talk, Andy and Cody discuss Dec Corn, Dec Fat Cattle and Spot Butter.

Questions or comments? Charts you’d like to see? Contact us at Insights@Ever.Ag, or give us a call at (312) 492-4200.

Charts sourced from Ever.Ag Platform.

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Transcript (Auto-generated):

00;00;00;17 – 00;00;08;21
VOICEOVER
Future trading involves risk and it’s not suitable for all investors. Content provided in this segment is meant for educational purposes and is not a solicitation to buy or sell commodities.

00;00;08;23 – 00;00;21;01
CODY
Hello everybody, welcome back to another episode of Tech Talk. I am Cody. He is Andy. For reference, it is Friday, June 23, 9 a.m. in the Central Time Zone. Little early one this morning.

00;00;21;02 – 00;00;27;27
ANDY
Early tech talk with like, you know, like what’s the morning show? I feel like you’d do good on a morning show.

00;00;27;29 – 00;00;29;05
CODY
I think I would.

00;00;29;05 – 00;00;37;15
ANDY
A little coffee or something like that you can like talk about like mowing lawn and stuff and like making like frittatas. I feel like, you know, you’d do well on a morning show.

00;00;37;18 – 00;00;42;10
CODY
We’re giving everybody the open right on some of these markets. I mean, we’re rocking and rolling.

00;00;42;14 – 00;00;49;12
ANDY
What else could you want? To wake up with Cody and a cup of coffee- that sounds like a show right there. Cody and a cup.

00;00;49;14 – 00;00;50;05
CODY
Well, I love it.

00;00;50;08 – 00;00;52;12
ANDY
Speaking of, why don’t we start? Which one is first here?

00;00;52;15 – 00;00;55;09
CODY
Little DEC corn just reopened itself.

00;00;55;11 – 00;00;59;11
ANDY
A little December corn. I guess what goes up must come down.

00;00;59;13 – 00;01;06;04
CODY
I suppose, in a big way. That’s the thing about this market recently, as you can see, it’s been- the volatility has been wild.

00;01;06;07 – 00;01;31;26
ANDY
So, I mean, it and talking to some of the folks internally, it seemed like it just turned into like a big weather trade. Right. And you had some, you know, a nice little breakout here. But now I draw your attention to- it got overbought according to the RSI, right? Down here, secondary indicator? And then it crossed back into, you know, like it crossed back through the overbought.

00;01;32;02 – 00;01;46;11
ANDY
So when you cross into it and then cross back through it, that is typically like a sell signal, right? So if the chart looks, you know, if you have like a bearish setup and then you have this, that is typically, you know, confirmation of bearishness if you will.

00;01;46;11 – 00;02;11;08
CODY
Ok so here’s my question, I have a question; so, intraday you go from overbought to back under the RSI and then back to overbought and it settles above there. So my question is here with DEC corn we’re at, what, 592- $6 seems to be a pretty good point, right? I mean, three days ago, $6 was a pretty good point of support or I’m sorry, resistance became support there.

00;02;11;08 – 00;02;20;24
CODY
And now we’re just kind of flirting around that same number. If we go take the RSI above overbought and settle there, what does that tell you within the intraday movement?

00;02;20;27 – 00;02;35;15
ANDY
Well, so it’s, it’s just like the same- it’s just like in, how do I say this. With candles where you would want to see like a closed and then an open in that direction. Right. Because you kind of had something similar. Exactly what you’re talking about right over here.

00;02;35;17 – 00;02;38;03
CODY
Right. That’s what I’m asking.

00;02;38;05 – 00;03;00;28
ANDY
Yeah. So it wasn’t until you had actually. Excuse me, it was over here. Sorry. This I think it’s kind of like the worse of the two. Right? So you had all this. It was just like a, to use your parlance, flirting with that line. It wasn’t until you cleared it and then started to kind of go and had, you know, multiple closes because you also want to make it relative to, so you want to also make it relative to the candle that you’re looking at.

00;03;00;28 – 00;03;23;12
ANDY
Right. Because each close has its own kind of like, I guess like piece of that line, but you want to use it as a secondary indicator, right? So if look, let’s say to your point, you come back for us to come back over this overbought line, this candle would have to close, you know, would have to come off the lows quite a bit.

00;03;23;14 – 00;03;32;26
ANDY
But as it stands right now, you’re going to have a small term pennant that is forming. If you get this close here, it’s a weak I mean, just forget about looking at the secondary indicators. This would look weak.

00;03;32;28 – 00;03;33;16
CODY
Correct.

00;03;33;19 – 00;03;45;24
ANDY
Right. And so then if you get an open in that direction, you’d get the confirmation from the RSI and you’d be a seller. Right. So then the question is, where do we go from there? I mean, then it’s probably down and around here, right? Five and a half, five double.

00;03;45;27 – 00;03;48;16
CODY
You have a 535, I mean, yeah, yeah.

00;03;48;18 – 00;04;10;14
ANDY
No, I mean, this is it. You know, it’s, it was grinding really well, like this uptrend, and then it just took off. Yeah, right. So it’s, it feels like it’s going to be like an inverted V bottom. Right? So in the past we’ve seen the bottoms where it’s literally a Z. So now it’s going to be what you want to call that, like a steeple? Little house or roof or something like that?

00;04;10;17 – 00;04;11;03
CODY
Yeah.

00;04;11;06 – 00;04;13;27
ANDY
You have a roofing business, by the way?

00;04;13;29 – 00;04;14;28
CODY
I do not.

00;04;14;28 – 00;04;16;29
ANDY
You don’t? I thought you did.

00;04;17;02 – 00;04;22;19
CODY
I don’t know anything about roofing. The only thing I know about is talking about charts with you, my friend. That’s it. That’s pretty much.

00;04;22;19 – 00;04;24;13
ANDY
That’s it? Oh , ok.

00;04;24;16 – 00;04;38;19
CODY
Okay. So, getting back to that, if we settle above $6 here and that and we get an open on Monday, we are- yes, an open on Monday, that would be another bullish confirmation, even though we’ve dropped almost $5.90.

00;04;38;21 – 00;04;50;01
ANDY
Well, it depends on how you open. Right? Like let’s say you get a close at 601 and then you open below today’s low or something like that. That would be weakness.

00;04;50;04 – 00;04;50;22
CODY
Sure ok, yes.

00;04;50;24 – 00;05;20;11
ANDY
So it really is again, it goes back to you have like the pattern and then how does it respond the next day? How do people digest, you know, like let’s say you get to this close like just like this, right? You had like a clear uptrend that was pretty pronounced. And but then you had this kind of like small you could almost argue this is I believe the name is Hakari (Harami) Pattern, where it’s, you know, the entire range of the candle is inside the previous day.

00;05;20;13 – 00;05;21;00
CODY
The body of it?

00;05;21;01 – 00;05;48;19
ANDY
And then it opens lower, like it’s an inside-out day. That’s a sign of a trend reversal is that you have a candle that’s inside the previous days and then opens in the opposite direction. So it’s basically like this session put a stop to this one. But yeah, no, I mean you’ve got link between that, between, you know, this candle is something we close here, but then the relative strength failing to maintain in the overbought territory, it coming back into it- that is bearish conformation.

00;05;48;22 – 00;06;07;19
ANDY
So let’s say we just settled right here right here this would be- and then we open one lower. Doesn’t have to be much. That would be weakness and you want to be a seller. I don’t know, does the hammer, like, the hammer was like flying here. I mean, the hammer must have just been glowing with all this DEC Corn that was getting bought.

00;06;07;22 – 00;06;15;01
CODY
Yeah. The hammer slowing down now a little bit. We’re going into the weekend, it’s Friday. You got to be careful with that hammer on a buy on a Friday.

00;06;15;03 – 00;06;21;18
ANDY
If you’ve got to be careful with the hammer on a buy on Friday. I don’t know. If that hammer gets enough pressure, it’s going to crush something.

00;06;21;18 – 00;06;30;11
CODY
So, speaking of a chart the hammer might like to buy, here’s some DEC fats. So, we haven’t moved anything since we talked about this.

00;06;30;15 – 00;06;54;26
ANDY
Well, actually, that’s not true. That’s not true. I put in I put in because internally, one of the folks in our internal chat call. Yeah. So he’s asking the question, is this a bull flag? And it’s certainly shaping up like it could be, right? So like, where my head was going was that we were going to just see we continue to see these lower highs bump up against like a same bottom sort of speaker, like a like a horizontal line.

00;06;54;29 – 00;07;14;26
ANDY
And it would be in the descending triangle. And his, you know, his thought was, is this a bull flag is taking shape? And, you know, if we can get this little breakout here, then he’s he may be onto something. Right. Because, you know fats and feeders, especially feeders being inverted to corn. We saw feeders you know, take a big hit as corn rallied.

00;07;14;27 – 00;07;33;17
ANDY
Right. And so you seemed like at least the thought was that we’re seeing some pressure in back cattle here because of what was going on in corn. But if we start to settle that market down a little bit, this is taking shape like it could be a bull flag. So bull flag is basically it’s almost like I think of it like waves one, two and three.

00;07;33;20 – 00;07;51;17
ANDY
Right? It’s just like, it’s like the wave two takes a lot longer and it creates some of like it looks like a flag, right? So if you get rid of this line, right, the measurement would be you take basically the length of, they call it the flagpole, and then just added on to wherever that breaks out from.

00;07;51;19 – 00;08;03;00
CODY
And as of, where you have the downward trend drawn, and it is early in the trading day right now, but we have broken out of the downward trend so far. So far, not a settle! Not a settle, but a trade.

00;08;03;06 – 00;08;24;29
ANDY
So far, we should have. Yeah, you need to get a settle through it. And then if you if we open- let’s say we settled through it today and then open higher on Monday. Yea, you’d want to, you’d want to be looking for this measurement here, 188 and half. Big bull market here. So, the only issue I’d say the thing that you’d want to exercise a little bit of caution is, is you’re getting some bearish divergence from the secondary stuff, right?

00;08;24;29 – 00;08;48;06
ANDY
So the momentum is clearly then to the downside, Right. And so if you look at you have to look at like the momentum is basically this dash line is a zero line. So when it crosses from positive to negative territory by going from higher to lower here, it’s what it’s saying is that the bears are getting more like lower closes relative to the last in this case, 12 trading sessions.

00;08;48;09 – 00;09;04;04
ANDY
So you want to see that turn back over positive. And same with what we just look at the RSI, right. And so you know it, it crossed trying to pull back to the overbought and then just it couldn’t materialize it, right. And so you’re getting some bearish divergence. That’s the only thing that kind of makes me a little bit hesitant about that.

00;09;04;04 – 00;09;20;15
ANDY
You want to see that. You don’t want to see this or this if you think we’re going to rip this thing higher, right? So like, let’s say you get a close higher and then this thing crosses back over. Yeah, I mean that’s that’s a nice confirmation of the bull flag there. But yeah, now it’s starting to look that way.

00;09;20;19 – 00;09;23;23
CODY
Is your blue line right there, I’m just looking at mine, is at the 20-day moving average?

00;09;23;29 – 00;09;30;11
ANDY
That is the 20-day you are correct 20, 50 and then this is the 200 day is going way down here.

00;09;30;13 – 00;09;44;04
CODY
All right. So we drop over the past two days, then consequently bounce ourselves right off of there. So that’s gonna be I assume another big telling indicator of if you can settle below that, then you start making your way. Okay, this could turn into a little bit of a reversal, but until that happens.

00;09;44;07 – 00;10;02;26
ANDY
Yeah, no. It was starting to kind of look like it could be an M right here. And then it’s just the more we make this kind of like, I guess, consolidation and like, you know, like almost like pennant forming, it makes that flag and that’s a bit, that’s a bullish indicator. Right? So again, you want to take the measurement of that,

00;10;02;29 – 00;10;13;17
ANDY
they call the flagpole, from where it breaks out to the tip to the top of it, and then just lay it on top of wherever breaks out from. So in this case, it’s approximately 188 and a half. If we settle here today.

00;10;13;19 – 00;10;14;10
CODY
Okay.

00;10;14;13 – 00;10;16;18
ANDY
Beef just keeps getting more and more expensive.

00;10;16;20 – 00;10;17;11
CODY
Dude.

00;10;17;14 – 00;10;20;29
ANDY
Are you going to go to it at all this Fourth of July? Like what do you do.

00;10;21;01 – 00;10;31;23
CODY
Well, and I guess that’s part of what you’re bringing to this market is you got a lot of these holidays that are coming up, I assume, bringing some of the strength to the market, right, outside of the technicals that we’re talking about.

00;10;31;25 – 00;10;38;06
ANDY
I mean, while I can’t imagine- I can’t imagine you’re going to have like a vegetarian Fourth of July.

00;10;38;09 – 00;10;39;25
CODY
No, no, absolutely not.

00;10;40;01 – 00;10;50;26
ANDY
I mean, that’s like insulting, like. Exactly. Sorry to any vegetarians out there. But, you know, I don’t see Cody having, like, soybean patties on an on the grill, like it’s going to be beef.

00;10;50;29 – 00;10;55;21
CODY
Right. Are there corn patties to get the market up a little bit? Possibly. But I digress.

00;10;55;21 – 00;11;08;01
ANDY
You can still like grill or like, you know, have corn along with your, like have you corn on the cob. I bet you make a mean would you like would you grill corn or do you would you boil it.

00;11;08;03 – 00;11;23;26
CODY
I don’t grill. I’m not I’m not a grilling person. I started my gril on fire about two years ago and that was the end of my grilling career. And I mean, like burnt it down, grease fire. We’re done. That is a full retirement. Yeah, I have since retired. I can make a mean bowl of cereal, and that’s about it.

00;11;23;28 – 00;11;29;13
ANDY
What? You burned a grill down? Does- Like- They’re meant to be, like, on fire.

00;11;29;15 – 00;11;30;28
CODY
Yea, well, they’re a little bit more plastic than I’d remembered, so.

00;11;30;29 – 00;11;42;19
ANDY
Was it like one of those children’s Weber grills that you like, you thought it was like a real grill. You got it, like real cheap. And you would say this is a deal over here. And it happened to be plastic, but you filled it with briquettes anyways.

00;11;42;20 – 00;11;47;00
CODY
All right, moving on.

00;11;47;00 – 00;11;52;16
ANDY
That’s really surprising. Okay. I guess you learn something every day. Alright so you’re boiling your corn, then, I guess.

00;11;52;19 – 00;11;53;07
CODY
You learn something new.

00;11;53;07 – 00;11;59;23
ANDY
Well, speaking of corn- what’s one of the things you love to put on corn? Butter.

00;11;59;25 – 00;12;01;09
CODY
Butter. That’s it.

00;12;01;09 – 00;12;18;13
ANDY
And so I think butter is going to get a little bit cheaper for you. This is as a monthly of the spot market. Right. And I mean, gosh, look at this consolidation that we’ve seen here lately. It’s just been out of anybody watch a spot day to day. But I mean, this is this is the start of the year.

00;12;18;16 – 00;12;45;03
ANDY
$2 to $2.30 and a half, yesterday close is at $2.38. I mean, this consolidation, I mean, it’s just been sideways market assist. But what I think is actually taking shape here, it’s the expression, it’s a wedge pattern. And wedges are typically when you have a very small consolidation, if you will, but it moves slightly against like the preceding move, right.

00;12;45;03 – 00;13;06;08
ANDY
And so in this case, we went, we’ve moved $0.09 higher since the start of the year. But that sort of like wedge consolidation is typically the market kind of sitting still until it goes in as another, in this case, another break. Right. And so you have this big down candle here. I mean, what is this? This is $2.90 down to $2.38. Goodnight. In a single month.

00;13;06;11 – 00;13;27;27
ANDY
And then we’ve moved $0.08 basically over the last one, two, three, four, five, six months. This is I think this is a wedge pattern. It’s a continuation. It’s moving very, very slightly against the preceding trend, if you will, which is another indication of a wedge. Wedges are typically, you know, a prelude to a continuation of the preceding trend.

00;13;28;02 – 00;13;45;14
ANDY
So in this case, expect a break. And a lot of times you just take, you know, like in terms of a measurement, you probably want to take where it broke out from here. So in this case, basically just lay this candle on top of here and that’s typically where you want to measure from, right? So let’s just do that real fast.

00;13;45;20 – 00;13;52;13
CODY
Now, preceding a wedge, would you break as hard as that candle is right there or is it more of a steady downward trickle effect?

00;13;52;14 – 00;13;55;16
ANDY
You’d probably be looking for a pretty aggressive break.

00;13;55;19 – 00;13;58;24
CODY
Okay. So, you’re kind of stair-stepping it down. Yeah.

00;13;58;26 – 00;14;16;21
ANDY
Yeah, I you know, maybe over the course of in this case, two months, two candles. I mean, this is- this is acting like it wants to get like has one of these types of candles or maybe two of these in a row and get back in that where it is right here. This. But yeah, I think this is a wedge.

00;14;16;24 – 00;14;40;28
ANDY
You know, you look for a breakout from like a low. So in this case, this is $2.30 and a half it looks like now excuse me, $2.2675 is the low of the whole like pattern here of itself. So let’s say a $2.25 close I think is a quick trip down to, in this case I mean. This is back below two bucks, which is kind of hard to believe when you think about how long we spent above $2.

00;14;40;28 – 00;14;55;16
ANDY
I mean, this is going on a year and a half. But that said, I mean, look at what’s happened to the cheese market. Here’s a place, where we were a dollar, you know, we were just in $1.30 territory for the block. So for a while there felt like we were never going to go below two bucks.

00;14;55;21 – 00;15;18;24
ANDY
So, I think that I guess my point is cheese is a really good kind of example and demonstration of how, you know, a market can go back to, you know, previous lows kind of thing. Right. It is possible to go back into the low $2 butter. So yeah, I think there’s a wedge. I think it’s going to be, the next step is to see either two of these or maybe one of these and head back in here.

00;15;19;00 – 00;15;25;08
ANDY
Yeah, I guess you’re going to be able to butter up your corn a little bit cheaper, maybe, but.

00;15;25;10 – 00;15;26;23
CODY
Little cheaper in the long run.

00;15;26;23 – 00;15;27;23
ANDY
Do you have like a fire extinguisher, at least?

00;15;27;23 – 00;15;33;08
CODY
I do now. I do now. I’ve learned my lesson.

00;15;33;10 – 00;15;39;11
ANDY
What about getting like, you know, what about getting like a pellet grill? You know that’s, its- it’s pellets.

00;15;39;14 – 00;15;40;28
CODY
I know, I know.

00;15;41;00 – 00;15;44;12
ANDY
You know, you just- you push the button, you turn the dial.

00;15;44;13 – 00;15;47;05
CODY
And I know I should invest in one, I just-

00;15;47;05 – 00;15;48;27
ANDY
And they turn on, like the pellets just like poof!

00;15;48;29 – 00;15;53;29
CODY
I’m just Dutchman cheap, and I don’t want to leave my house on fire. It’s just one of those things.

00;15;53;29 – 00;15;55;24
ANDY
Then keep it away from the house.

00;15;55;26 – 00;15;59;28
CODY
I know, I’m just making excuses at this point. I just need to bite the bullet and do it.

00;16;00;03 – 00;16;07;05
ANDY
Just do it. Get back on the horse. Just because you almost burnt your house down and killed yourself doesn’t mean that you can’t go try again.

00;16;07;07 – 00;16;12;07
CODY
Exactly. Yeah. All right, well, I’ll work on that for next episode. We’ll let everyone know.

00;16;12;07 – 00;16;15;08
ANDY
Just go get, like, a small one, you know.

00;16;15;10 – 00;16;16;16
CODY
Test it out.

00;16;16;19 – 00;16;22;10
ANDY
There’s probably a July 4th sale coming up or like a, I don’t know. A post-Father’s Day sale. Just say you’re a father, I don’t know.

00;16;22;14 – 00;16;23;29
CODY
Yeah, probably.

00;16;24;00 – 00;16;24;28
ANDY
There probably are.

00;16;25;00 – 00;16;25;22
CODY
Yea, I mean.

00;16;25;24 – 00;16;27;16
ANDY
Maybe, maybe.

00;16;27;18 – 00;16;43;14
CODY
All right, everybody. Well, with that- learning more about my life- we appreciate you watching, tuning in. If you have not subscribed to our channel, please do subscribe to the YouTube channel. Click the like button. Give us a thumbs up, leave us a comment, ask for a chart so Andy and I can look at it for next week.

00;16;43;16 – 00;16;44;17
ANDY
Ask for grilling tips.

00;16;44;24 – 00;16;52;18
CODY
Ask for grilling tips! Send me some tips, I’m always looking for. Until then, everyone have a fantastic week. Hopefully you get some rain. See you next week.

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