In this episode of Tech Talk, Andy and Cody discuss lumber, March feeder cattle and the S&P 500.

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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00;00;00;17 – 00;00;08;29
VOICEOVER
Future trading involves risk and it’s not suitable for all. Investor contact provided in the statement is meant for educational purposes and is not a solicitation to buy or sell commodities.

00;00;09;01 – 00;00;09;21
CODY
Hello everybody.

00;00;09;21 – 00;00;21;16
ANDY
Welcome back to our episode of Tech Talk. I am Cody. He is Andy. It is the 9th of November, about 410 in the Eastern Time zone, 310 Central area, doing what?

00;00;21;19 – 00;00;25;28
CODY
I’m doing really well Now when I’m talking to you, I’m doing great. You’re going to add.

00;00;25;28 – 00;00;30;06
ANDY
A little pizzazz to the opening like Jim does on the Green field.

00;00;30;08 – 00;00;36;08
CODY
Good luck with that. You know, I mean, you can only hope to, like, hold a candle to that.

00;00;36;11 – 00;00;40;19
ANDY
The guy kills it every time I’m going to get better. I promise I’ll get better.

00;00;40;21 – 00;00;42;14
CODY
Is that going to be your New Year’s resolution?

00;00;42;20 – 00;00;43;26
ANDY
For sure. 100% being.

00;00;43;27 – 00;00;44;18
CODY
More like Jim.

00;00;44;25 – 00;00;48;17
ANDY
Exactly. In every single facet of everything.

00;00;48;17 – 00;00;49;00
CODY
Just all.

00;00;49;00 – 00;00;50;08
ANDY
Of it. Yeah.

00;00;50;11 – 00;00;54;08
CODY
But you sell your trucking by whatever car. What? I don’t even know what kind of. Jim, what kind of car address?

00;00;54;08 – 00;00;55;28
ANDY
We’re going to find out. I’m going to do it.

00;00;56;00 – 00;00;57;18
CODY
They’re going to sell the truck.

00;00;57;23 – 00;01;04;16
ANDY
Go home. But until then, today’s episode, we have three charts to come. I request.

00;01;04;18 – 00;01;20;22
CODY
Three. Actually. No, all three. Come on. Requests. Oh, pre in our pre prep, whatever you want to call it. All three Come on, request ones Anonymous two. Here’s the first one. Lumber. This comes to us from Nighthawk.

00;01;20;25 – 00;01;21;25
ANDY
Made off.

00;01;21;28 – 00;01;28;01
CODY
Nighthawk. Thanks Nighthawk request. What do you think a lumber here Cody I mean.

00;01;28;05 – 00;01;35;28
ANDY
It’s looking a little bullish. First day we said a little over the 100 day moving average since beginning middle of August here.

00;01;36;00 – 00;01;38;26
CODY
Oh, shoot. What’s going on here? You said 100 day.

00;01;38;29 – 00;01;46;04
ANDY
Yeah, It’s just in the past three trading sessions. And today was the first day that we settled above their Bam.

00;01;46;05 – 00;01;47;13
CODY
All right, so you’re looking at.

00;01;47;17 – 00;01;48;08
ANDY
Yes, sir.

00;01;48;10 – 00;01;59;01
CODY
Okay, so I just added in 100 day. Moving, simple, moving, average. It’s a simple one. And you are correct, sir. This is the first time in some time that this bad boy settled above that average.

00;01;59;06 – 00;02;10;09
ANDY
Now, you tie that in with the RSI down below. Not quite hitting over button territory just yet. There may be a little bit more room in lumber to the upside.

00;02;10;11 – 00;02;27;28
CODY
There sure could be. And you’re not wrong, right? I mean, like this. This bad boy still hasn’t gotten into overbought. And just because it gets over, it gets into that overbought territory like a sell signal or like if you’re long liquidate, it would be as it crossed back below it. Right. So you haven’t even gotten into a point where it is, quote, overbought.

00;02;28;01 – 00;02;50;24
CODY
So I do this. We have this on there, the momentum piece. You know, again, the stuff does trade technically, too, right? And so you have this former high right here and the momentum. Forget about the price for a second, but just the momentum piece, it is back to where that is now. So you can doing if you continue to move higher, you could have a breakout in terms of like a momentum relative to like in this case, the last 12 sessions.

00;02;50;27 – 00;03;07;21
CODY
That’s friendly. But I think you just look at the chart to your point simple at 100 day closed over that you had a nice little popper right here followed up with like barely any sort of like fight by the bears And now you’re back about that again. Like that close is over this high right here. Yep. Yikes. That closes over this high.

00;03;07;22 – 00;03;14;15
CODY
So they talk. I don’t know what you’re looking for, but this chart looking pretty good, right? Looks pretty good.

00;03;14;21 – 00;03;15;25
ANDY
Get your lumber bought now.

00;03;15;25 – 00;03;19;24
CODY
Get your lumber bought now you’re going to go out and chop some trees down, maybe sell some lumber.

00;03;19;26 – 00;03;21;20
ANDY
At these prices. I think you’re going to have to.

00;03;21;23 – 00;03;25;07
CODY
Did you ever plant that corn, by the way? We weren’t going to plant in your backyard, Dad.

00;03;25;08 – 00;03;30;27
ANDY
I was going to. And then corn kind of fell apart. So we got to we got it.

00;03;31;00 – 00;03;46;25
CODY
Three work. Well, there was a there was a, you know, a little report today. Go check out, you know, what we talked about, generated it and maybe go check out some of their content to learn a little bit more about today’s report, Most selloffs that took place in the futures there. So it’s a little sidebar, but go check it out.

00;03;46;26 – 00;04;02;19
CODY
Either way, Nighthawk might want to go buy your lumber. Now, I don’t know what’s going on here, but it looks it looks strong like for this next one. This one, it came at requests anonymously. Certainly this has been one that’s been in discussion for a while now. I think we actually had this one on our last one. Yes.

00;04;02;21 – 00;04;20;13
CODY
It’s not like very recently. So I guess what sticks out to me about this one. So if you just look at this closed right here, it looked like it wanted to get going to the upside, right? You had the space, you had a clear shot. Take it back to 255, but you didn’t get the open higher the next day.

00;04;20;13 – 00;04;38;06
CODY
In fact, you got the complete, I guess, rejection of that closed. So you didn’t get like the subsequent open higher confirm the breakout. So that’s one attempt to break out. And then this was yesterday’s that’s a hammer. Yeah. Right. For those that don’t know, a hammer is basically, you know, it looks like a little hammer right here. Right.

00;04;38;08 – 00;05;00;09
CODY
You had a clear reversal from the the intraday low to the tune of a pretty good I mean, a pretty good rally off the lows after a big break like that. That’s usually indicative of a trend or something that’s more or less, in this case, downtrend running out of gas. These can certainly can appear anywhere, obviously. Right. And if it appears at the end of an uptrend, that’s usually like a warning sign, the uptrend is ending.

00;05;00;09 – 00;05;12;11
CODY
But in this case, it’s usually a sign when you’re when you’re trending lower that prices are done going down or at least running out of gas. Not here like good night.

00;05;12;14 – 00;05;33;29
ANDY
So to look at this, I guess what I was checking out on this one is bringing your eyes to the RSI. As you had mentioned, when we looked up lumber, the secondary indicators also can trade as if it were a chart. So if you look at the RSI from the 23rd when we had that first major break is where we broke below the oversold territory.

00;05;34;02 – 00;05;52;12
ANDY
Today we have not quite gone down as far as as we were on the 23rd there. So essentially like a a higher low, if you will. Yeah. So would you look at this and say, okay, tomorrow if we keep breaking and we break down to that where we kind of petered out in the oversold territory right there.

00;05;52;14 – 00;06;14;04
CODY
Correct. Yeah, No, I agree. I mean, I think what you trying to say is it’s it’s like it’s setting yourself up to at least got test this value right here. Right. So that’s you know roughly 18 and some little under 19 the value right here. Right. So again, going back to our discussion about, you know, lumber and approaching the RSI and like the other side of the coin.

00;06;14;04 – 00;06;20;03
CODY
Right. Overbought. Yeah. He crossed into oversold territory here. Right. I mean, let’s see if we can zoom in on this bad boy here.

00;06;20;06 – 00;06;21;25
ANDY
Is hard to really, I guess for myself.

00;06;21;25 – 00;06;23;04
CODY
Hard to see. Right.

00;06;23;04 – 00;06;33;19
ANDY
So looking at the RSI, if we break it a little bit more, get down to 226. That’s where we had a lot of support for 1 to 3 days in a row ago going back to June.

00;06;33;21 – 00;06;54;11
CODY
There we go. Okay, so that blue line is the oversold. So crossing below the blue line is a warning that it’s the market’s oversold. And so what’s interesting about that is that yesterday’s close, it brought it back or it brought it back above the oversold. That’s a buy signal. That’s at least a sign that like, hey, you don’t really want to be short anymore.

00;06;54;13 – 00;07;15;09
CODY
But what’s so interesting about it is that you didn’t get just so I reason I brought up this this formation right here. You didn’t get the subsequent like open higher here. Right. And we saw that did the market same thing occurred today where you had that you had the form, you had the hammer, you had, you know, it crossed back over, oversold into out of oversold territory.

00;07;15;10 – 00;07;36;01
CODY
The momentum started to approach zero and then just right in the face. I mean, that’s that’s a wicked close. So not only did you open lower, but you just basically, like trashed this entire channel right here. This one right you got you close below yesterday’s low. Yeah. I mean that just looks weak. And if I can add a little bit of that.

00;07;36;03 – 00;08;00;09
CODY
So this is the weekly I mean when I, when I, when we looked at this prior to and this is this one is like a longer term, much longer term trend. Right. This goes back to March 2020. Start here. You could break this market down, this 100 this one week average. Right. We were looking at that earlier for a longer 100 period that you could break this thing down into like one 9185 and still be in an uptrend.

00;08;00;11 – 00;08;03;00
CODY
So there’s a lot of room to break.

00;08;03;03 – 00;08;04;22
ANDY
So that’s a good point.

00;08;04;24 – 00;08;27;28
CODY
And what’s crazy about this one is that you typically when you look at charts like this, there’s a consensus and again, it’s up for opinion, but that like the longer term charts typically typically Trump like the shorter term ones, right? So like this one momentum clearly crossed zero right here. So that’s bearish. And then you went from overbought to clear.

00;08;28;00 – 00;09;02;01
CODY
You know, you went back into over, you know, cross back below. That’s a sell signal. But then you cemented it over the next couple of sessions, too, Right? So similar to how we look at like, you know, actual patterns that should play out. You want the next open to be in that direction, which is looking to you know for the on the daily that didn’t pan out like the next day’s open was just completely negated that that the previous day’s candle and just didn’t cement that that formation the opposite is happening here right so you had the cross from zero you had the cross from overbought and back below on the RSI here, and then

00;09;02;01 – 00;09;14;07
CODY
you had the subsequent next session cementing those. So this weekly is got plenty of room to break and it’s got these secondary indicators giving them kind of like a little bit, little bit extra push.

00;09;14;09 – 00;09;19;04
ANDY
So just for sake of argument, what if we looked at this on a monthly.

00;09;19;07 – 00;09;19;24
CODY
Let’s do that.

00;09;19;28 – 00;09;26;28
ANDY
I just pulled it up and it is eerie resemblance to 2013 2014 nearly.

00;09;27;01 – 00;09;51;08
CODY
Yeah. I mean, these longer term charts are showing us that these like these markets they’ve had I mean just a huge run, right? Record high prices, perhaps more even despite this. This is a significant break to 52 to 30. That’s a that’s a big number, right? There’s barely any volatility into that degree for the entire year. So, you know, say, the beginning of 2020.

00;09;51;11 – 00;10;15;00
CODY
Know what happened then. Yeah, but this I mean, so this is a big sequence of moves. But it like again, these longer term charts here point are showing us that there’s more potential for weakness despite having a significant break already. I equate it back to like when we go back to 22 I think it was yeah, kind of reminds me of like when we were back in like $25 plan for class three.

00;10;15;02 – 00;10;38;07
CODY
This is Sep 22 SEP, Class three 2022. You know, you had this big break from 20, 20, 45, 20, nearly 25 bucks down at 23. That’s I mean, that’s a big move down 50. But you know, relative to what we’ve seen before and what we know milk do and like, you know, how high $25 was relative to the rest of like like last ten years really ever.

00;10;38;09 – 00;10;57;05
CODY
There is still more room to go. And it’s easy to say that in hindsight. Right. But I guess my point is, is that Cedar’s, despite having a significant break here, these longer term charts are showing us that you can break significantly more and still be trending higher, right? So look out.

00;10;57;08 – 00;10;57;26
ANDY
Yeah.

00;10;57;28 – 00;11;16;08
CODY
It’s an interesting this close. I mean, we saw tomorrow’s session to estimate the cement this week. Liam Peters develops nasty face. Right. It looks like the next stop is a quick trip to six to turn right in here where it really started to go. Like, I think that price becomes just a magnet. And then maybe we see some stuff like this for a little while.

00;11;16;11 – 00;11;19;06
ANDY
We’re just going to hammer ourselves out there for a little while, trade.

00;11;19;06 – 00;11;30;24
CODY
Sideways and consolidation. And then I think you go test us again. So it’s that’s certainly showed us that can have big moves to the upside, but bears tend to jump out the window. So I be a little bit careful here.

00;11;30;27 – 00;11;32;08
ANDY
Absolutely.

00;11;32;11 – 00;11;38;20
CODY
Last but not least, we appreciate the the requests from the word. This one came from Bilbo.

00;11;38;25 – 00;11;40;10
ANDY
Bilbo, our good buddy, Bilbo.

00;11;40;17 – 00;11;50;02
CODY
Our good buddy Bilbo. You didn’t want to talk about these corn this time. You want to talk about S&P? What do you think here, though? Looking to be retired any time soon or.

00;11;50;05 – 00;11;57;02
ANDY
We’re hopeful, as and we talked about this two weeks ago. I think we were on the S&P and we talked about the last time that.

00;11;57;04 – 00;12;05;17
CODY
I didn’t touch the I didn’t touch anything here except we did add from this 100 days from when you added it to lumber for Nighthawk.

00;12;05;20 – 00;12;11;01
ANDY
Okay. So super interesting. You haven’t heard that line. I mean, look, did we touch that today?

00;12;11;01 – 00;12;42;09
CODY
Pretty close. Pretty close. I mean, it was not quite, but it was Sure close or, you know, if you go back and I’m drawing a blank on his name. But the the book that was written about him was reminiscence of a stock operator. I’ll get the name, but I think he back in like the twenties coins he’s like I think considered like one of the fathers of technical analysis coins The idea that if you can have these kind of like accumulation periods and they represent like megaphones almost.

00;12;42;13 – 00;12;48;01
ANDY
As a megaphone, as an opening wide coming back down to a a smaller circumference of the.

00;12;48;01 – 00;13;07;13
CODY
Gold. Right. Like a megaphone pattern is typically like an accumulation period. And that’s that’s like almost like a prelude to like an increased volatility. So like, if that were to hold true, you would have like a bigger range tomorrow, closed higher. You go like a candle like this or something, You know, you haven’t read that book. It’s good book.

00;13;07;15 – 00;13;35;07
CODY
But like this was one of the this is one of the formations that I believe he really used and kind of like I get the right word. But that was something that you would see in stocks before. You didn’t have like a big move. So I don’t know. It’s not maybe it’s coincidence or not, But to your point, we bumped up right against this pretty long term downtrend right now, you’re starting to see like a formation that is typically a prelude to like a much larger, volatile move.

00;13;35;07 – 00;13;51;00
CODY
So if we get like a candle tomorrow that basically encompasses as yet, today’s range is higher and then closes above this long term downtrend. And then we open like Monday higher, that could get pretty wicked like to the upside.

00;13;51;05 – 00;13;51;29
ANDY
To a bullish move.

00;13;52;00 – 00;13;55;21
CODY
Okay Yeah Yeah. So I think we want to be a little bit careful with that.

00;13;55;23 – 00;14;01;29
ANDY
So the megaphone move it’s the highs and the lows, not necessarily the closes that kind of megaphone, Right.

00;14;01;29 – 00;14;17;22
CODY
Yeah. You start to get like again you just like you think about like a traditional like channel, it just kind of bounces between the same range. But in this case, like the range of this, like formation gets bigger and bigger until you have like a pronounced move directionally. So yeah, it’s certainly sentence of up to that potential right.

00;14;17;22 – 00;14;36;22
CODY
So I guess the flip side of that is, you know, you have tomorrow you need to see like an open lower and then continuing to break kind of cement like, you know, bouncing off of this again. But yeah, now watch out here. I mean, I think because of that mega sun starting to take shape, you had a higher session tomorrow, close above this this downward trend.

00;14;36;28 – 00;14;58;26
CODY
You know, it could get a little bit of explosive to the upside. And, you know, this is a weekly right. Last week’s candle rejected one or closed above one twos. Right. Really? This is one, two, three, four, five weeks worth of trade last week. I mean, that’s now. And then you had an attempt to get below a pretty, pretty big moving average and then clearly rejected it.

00;14;58;29 – 00;15;07;24
CODY
So the longer term stuff is hanging in here pretty well. I think tomorrow’s close like the way or I should say open and the way it closes tomorrow is going to be pretty important. We’ll see.

00;15;07;26 – 00;15;14;06
ANDY
Well, I mean, I think biggest takeaway from this tech talk is long term charts are something to definitely keep an open.

00;15;14;06 – 00;15;15;23
CODY
Right there gets you a lumber but.

00;15;15;23 – 00;15;18;27
ANDY
Nighthawks by lumber Nighthawk it you’re S&P.

00;15;19;00 – 00;15;23;27
CODY
Rodrigo. Yeah. Go read that book by the way. Reminiscent of the stock operator. It’s a good one.

00;15;24;00 – 00;15;26;18
ANDY
I’m going to go to local library, pick that one up tomorrow.

00;15;26;21 – 00;15;29;23
CODY
Your local library. Go to your local library.

00;15;29;25 – 00;15;42;20
ANDY
But still get your library. We appreciate you guys tuning in every single week watching Andy and I talk about these charts. But until next time, Andy and I will be back next week. The following week, we will be off as we have Thanksgiving turkey.

00;15;42;20 – 00;15;43;17
CODY
Thanksgiving this week.

00;15;43;17 – 00;15;44;26
ANDY
Man, don’t expect a lot.

00;15;44;27 – 00;15;46;18
CODY
After we do.

00;15;46;20 – 00;15;50;14
ANDY
So, but we’ll be back next week. Your favorite tech talk analysis, guys.

00;15;50;16 – 00;15;55;04
CODY
Wait a minute. How are you going to host anybody when you have like three plates, a bowl and like two forks?

00;15;55;11 – 00;15;58;18
ANDY
Well, that’s what we’re not we’re going to we’re not doing it in two weeks, just next week.

00;15;58;20 – 00;16;02;03
CODY
Got it. We’re not doing the show because you only have like three bowls.

00;16;02;09 – 00;16;02;27
ANDY
Exactly.

00;16;03;04 – 00;16;04;01
CODY
One plate.

00;16;04;03 – 00;16;11;26
ANDY
Exactly. It’s a full house. Got it. Okay. Awesome. We’ll see you guys next week. Thanks for tutored by.

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