In this episode of Tech Talk, Andy and Cody discuss spot butter, Jan soybeans and the S&P 500.
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Future trading involves risk and is not suitable for all investors. Content provided in this for educational purposes and is not a solicitation to buy or sell commodities.
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Hello everybody. Welcome back to another episode of Tech Talk. I am Tony, he is Andy. We make up the tech talk team together. How are you doing?
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But I’m good. How are you.
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Doing? Well, doing very well. Look at this, new view. Same. You.
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You see? I have a camera that will actually like it. Should track making it. Yeah. Does it? Yeah. There it goes. And then let me go back in. There it goes again.
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Dude, you’re living in 2030.
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It’s technology.
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We got a books. You know, maybe you can put like a book of the week on the bookshelf for the folks.
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Like a pick of the week or something like that.
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Exactly. You’re it.
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You’re a fast reader if you’re reading a book per week, but it’s possibly very true.
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It’s a good.
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Point. Do you have a favorite book? Yeah, my favorite book. Are you reading a book right now?
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Which one did I just finish? Sun Zoo Art of War. I had to go through a few different times because of the language barrier, so it took me a solid two and a half months to read it because of all the intrinsic words that are in there that I had to actually look up because of the language switch.
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Yeah, but it’s a good book. It’s I would highly suggest it. Anybody?
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It feels like a book you can read through multiple times and you’ve read it. Some take something away every time. Yeah. Only once. But yes.
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I enjoy it. All right. Speaking of enjoying things, we have three do.
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Before you do, here’s the book. I’m ready right now. You ready?
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Oh, I’m sorry, I did not ask you, I.
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Paul, that’s all right. It’s all right. It’s called the Once and Future King. Okay, excellent. It’s got some, like, weird time travel stuff going on now, so you better sit down and, like, really think about it. Like one of, like we.
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Just started a new segment. Did we?
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Yeah. Book of the week. Okay, well, book two, book club. One of the characters travels. We all travel forward through time. The character travels from the end of time to the beginning of time, like everybody else is going this way. He’s going this way. All right.
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Book of the week.
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Look at the week. There you go. Once a future king in Art of war gets them. All right, here we go. I actually so we originally when we were talking about this at the time, we didn’t have any charts on request, but I did actually have somebody call me this week, yesterday and ask about a specific chart and ask me my opinion about it.
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So I’m going to go out on a limb and say, technically that’s a request.
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We’ll take it.
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We’ll take it. It, we’re taking it. This is Minnesota. Dan asked me about spot butter and actually pointed something out. This is not something that I did necessarily, but pointed out that, you know, if you go back to like, like the Covid low level and you draw like I think the monarchy, it’s like, you know, you’re talking like one tenth.
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Yeah.
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So huge retracement of basically like this former high of 350 right. All the way down. Where do we start to land. Super interesting that we’re running into this traffic. I didn’t even touch this. Look at this. Look at that 33%. We’ve retraced that.
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He brought this up to draw the Fibonacci at these. No kidding.
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Can’t make this stuff up.
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That’s pretty.
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Cool. Give the people what they want. You just can’t make the stuff up, right? So, yeah, I mean, like, you’re basically hugging up against this guy right here. So what I think it’s super interesting about like today it’s just so this is today’s session really is what prompted a lot of this weakness. Right. Because we have what like a nickel lower ish.
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But what I think is super interesting is that if you recall a few weeks ago, I think it was this week right here, this low of 261. Yeah. This was the week. And believe we traded a boatload of cash. I think we set an all time record right, 106 160 plus lows or something like that. It was nuts.
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Right. And so yeah, we had a little bit of a bounce off of that. But now we’re through that price. The fact that we’re able to get through a price that traded so much volume is, I think, really supplements like the breakout itself. Right? I mean, if you breakout on high volume, that always confirms the price action or at least lends more credibility to it.
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Right? So yeah, I mean, we got to this big price or excuse me, this area where we traded huge volume, record volume for a week and now we’re through it. So I think you got to be super careful of spot butter. I mean and this, this 33% retracement of this entire range of butter going back to 2020. You know I think that’s also a pivotal level.
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So it’s super interesting that we got to this point huge volume. And you’re getting up to like a 30. You know third retracing of this big move. The next stop would be assuming we break through here. You know I gotta think we run into a little bit of traffic call around here. Right. There was all this noise. Noise.
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Let me just seven.
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Zero, 245.
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Yeah. So I already had this kind of like this ellipse thing drawn. Let me just take this out. Just a hair. Oh, yeah. I already had this guy drawn. Right. And so you had all this noise. That’s about 245. If not, then the next. If we can’t get there, get any sort of material support there, then the next stop is really gonna look at.
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We’re looking at the halfway mark is here. All this noise. Right. Super interesting that like, we’re getting all this traffic, at this, at these Fibonacci retracement prices of the entire range of butter from, you know, Covid low to now or the high.
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To low, maybe the low of would be like what November of.
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You’re talking about Nov. Yeah. This time. But this time last year.
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Yeah.
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Obviously right around Thanksgiving your favorite holiday.
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There you go.
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Yeah. Watch it okay. We’re going to be cool. Speaking of Thanksgiving like pumpkin, do you put a big thing with cream on there too or just not always.
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You can’t not right.
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Fair enough. It’s respected. I did not disrespect anybody’s buy trust me.
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But just saying.
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All right. So anyways. So yeah I mean you got into this traffic super interesting that this retracement level is here again. I didn’t do this. This was a Minnesota dance. I’m going to give him kudos. Boy this one out. But this is to me that’s like I think this close. Assuming we close here it’s still Tuesday but huge volume.
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And now we’re through that price. That’s a big warning sign.
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Yeah it is.
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Let’s keep this could get dicey for butter and I think which you have to be somewhat careful of is let’s just measure this real fast. 319 I’m not that good at math, so let’s just do 320 to 263. So another $0.60. You’re talking about $2. If you if you basically replicated this move right here okay. So let’s just take that lay it right on top.
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Whoops.
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You dollars.
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And look at that 60% retracement. All right. Two thirds retracement right there. Two bucks I guess my point is is that there’s some pretty big indicators coming up for butter here. Large you know retracement values if you will, from the entire range of the whole contract itself. Yeah. You have all this noise. You have all this noise, all of which should theoretically act as support.
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But if it can then it just I feel like it’s a quick trip to the net to that next level. So in this case going from 260 to 2, you know, 245, 245 to 230 ish to 32, we’ll see. The only one that doesn’t believe it, though, I’ll tell you what are the futures? Two it’s April, the June 25th, 27, you know, through September the futures have a nice carry built into what we’re talking about, I guess is my point.
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As you could see, the cash carry is very prevalent in the butter. Could be market right now.
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But hey, man, you sure can go lower. Two you know.
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That is true.
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I don’t know, we’ll see, but I just I feel like it’s necessary to point out, you know, the whole the range and the Fibonacci retracement and etc. and real fast to I think it was you that pointed out March butter do that real fast. That doesn’t look good at all.
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It does not.
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You and I are talking about the I think you and I are talking about this one. You’re straight. This one does not look good at all.
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No.
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No. And there’s and really, I would imagine.
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With the decades you’ve sustained in a row.
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Yeah. And like, there’s just nothing really here. I mean, like, look at this. Like, there’s no real meaningful support for 260, like 250 to 280. Yeah. So it’s just it’s tough to say, like, where does it run into any sort of technical support? Well, not until you get down like 252 or trade it sideways for a while. But even then, like this was a year out kind of thing.
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This is March of this year.
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Very illiquid at that point.
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Correct. So we’ll see. But butter I know it’s looking a little dicey. Let’s look at all spot butter looking a little dicey. We shall see. Yeah I don’t know if you want to try to reach out and catch the falling knife in this one.
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I don’t think it’s ever been a good idea in butter.
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Or anything, for that matter. But butter especially. All right. Next one. You wanted to rehash GM beans.
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We had to look at them.
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We had to look at them. You and I talked about this last week.
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We did. When you’re on opposite we’re on polar opposite sides.
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So I think I think according to you, you said today I was right and you were right. Is that.
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Correct? We were both right. That’s the craziest thing I will say. Bearish beans, which as you can tell happened about two days later, you’re bullish beans, which happened promptly that exact same day. And now we’re just kind of waiting in limbo to see what truly is transpiring to the market here.
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Oh, so we I think what we talked about was this last week, I can’t remember.
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What’s.
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Okay. So it would have been call like right around here basically.
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Right. Should have should been the fifth. Yep.
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Okay. So I think that the tough one here is that it had this failed breakout. Right? I think what I was looking for was a pennant that was forming. And for it to just rip, and it did for a little while. And then you have this big sell off intraday. Right. So that high was 1044. It close at 1030.
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So at the $0.14 off the high. And then yesterday it tried to rally and failed again and then opened lower today. Yeah. So like that to me is like I mean I hate to use a big F-word but it seems like a big failure to me. I wouldn’t want to be tried to get along anymore on this one, that’s for sure.
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No, I think when you and I were talking about it, it was on the completion of the W, which if you would have gone back to the seventh of last week, which it looked like it was going to honestly for sure, from that day, it looked like you could push up towards 1050, 1060.
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And only six here. Yeah, you’re only $0.06 away.
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Exactly.
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So I don’t know, like I said to me, to your point, tried to break out. Couldn’t do it open lower the next day and then lower against it.
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Yeah.
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And then you had you know RSI if you go back and look at this one too. So this secondary indicator but still trades well technically. Right. And so it depends on where you want to draw like the support area right where it’s where it really started to go I think you could argue is right here. We’re put in a higher low relative to here.
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Yeah. But I’ll give regular notes that we had between ourselves. And I think I was really getting after you on the six when it broke out of that pennant to the downside and almost made new lows and something to the effect of how high was. Right. And then.
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In my words, as soon as I hit enter.
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It’s, there’s like an emoji like egg on your face.
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Like exactly.
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No, I mean, to your point, we’re both going to right here and wrong. So I think though going forward. Yeah this guy right here really a failure to get into just get anywhere close to the day’s high and then open lower. Try to rally again to and then failed again. That’s two days in a row. Or it’s just like a punch in the face.
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Like I don’t think so I did. And then you open lower the next day, which is today’s session. And then you have this cross and RSI that is a clear sign of weakness but also has a lot of room to break. Right. You only you’re only you basically at the midpoint. So you could theoretically see more weakness just in that secondary indicator and still be like bearish.
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I guess on that point. Yeah. So yeah this looks weak. I mean this is, you know, clear attempt to break out and failed. What was the put that way I think we looked at together Jan. Oh it was like the 960.
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Yeah.
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And you said you want to sell this which would imply that you were bullish. So I got you there.
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What? No no no no. You have a rule now. Oh yeah. Yeah. Okay.
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Yeah. Okay. Okay.
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You should just look at the chart. Yeah. What would I do? Okay, I got you, I got you. Yeah, yeah.
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You’re okay. Yeah. Gotcha. You’re so. I guess the question is now would you sell this option? Look at just looking at the chart.
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Just looking at the chart I think now I you. The problem is it hasn’t really I mean, there’s no range per se on this chart to.
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So this is what I would like I think you can take a stab at owning this. And the reason being is that it tried to get into a new low and failed to do so. And, and then kind of bounced out of it with a nice. Yeah. Like I wonder if this is like a of the exhaustion gap.
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I’ve got a breakaway. Yeah. So breakaway gap is defined as like basically the start of a trend. The market breaks away gaps in order to do that. So breakaway gap is typically characterized just like okay we’ve begun this new trend. It did it in a really big way. So yeah I think you can take a shot at owning this.
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I mean, this is just call it the easy math. $0.07 below. And the goal you’re out. It’s $0.02. It’s a hundred bucks a car. Yeah. Whereas, you know, this thing clearly found some steam, you know, north of $0.20, 15 to $0.20. So you’re talking about three forex, you know, return potential with, you know, losing $0.02. That’s not bad.
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You know, where your risk reward lies.
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So to be clear for the viewers next time on this particular chart you want to buy it rather than sell it like I’m.
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Yes, I would be a buyer of this one. All right.
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I think.
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I forgot I forgot you did. You tricked me last time. You got me good. Which was right by the chart number. True.
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I didn’t trick anybody. I just said was.
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You.
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Want to sell?
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It was just technically a chart. Would you buy it or sell it? And. Yeah, I was a seller.
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Here’s a chart. Really? $1.
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Really.
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I think charting these options, especially like 20 to 20 8 to 30, Delta options, I think are really interesting ways to chart a different perspective. And yeah, you know.
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It takes your emotional thought process out of a to yeah.
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You start to see like what are like what I want to do with this market. Like here’s the derivative I can theoretically buy. And what do I want to do with that. What’s the price action there. Turn what are people doing. And you know and with regard to that specific derivatives. Yeah I think the higher delta you go it’s a little bit more difficult.
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You might the line. Yeah 2030 delta charts I think are really worth looking at last one certainly at least are we are we not going to be able to retire the wealth effect.
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And isn’t that that is what it’s called settled above 6000. And the S&P. Look at that.
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It sure did. Oh sure did.
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Look at that I guess my one question is does it look like it’s rolling over here.
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Great question.
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Because everyone always says stocks S&P Dow up up up up up up like a roller coaster. But at some point you have to have a little bit of a dip in there. To me it looks like it’s starting to roll over here.
00;14;08;16 – 00;14;28;14
Obviously with the election huge volatility. Yeah. Right I mean Election day was what the fifth. Yeah Super Tuesday thing. And then here’s that Wednesday I just ripped right. And you can get over 6000. And just kind of struggling to maintain that rally over 6000. The to your point is it starting to roll over a little bit. I think it’s possible.
00;14;28;14 – 00;14;45;28
I don’t like the way the scan looks. This RSI that’s starting to roll over a little bit too. I think it looks super interesting to see what the money flow in next year looks like. So money flow is basically like, you know, how the volume relative to down bars and up bars is right? So if you have more volume on a down bar, it weighs that number.
00;14;46;00 – 00;15;03;15
It weighs it more heavily. Yeah. So it slopes lower. So money flows kind of like in different here. It’s not a great indication that we got further strength, but it’s also not a big indicator that things just going to turn into okay. But that under itself could be bad news for the longs. And so to your point, we got over 6000.
00;15;03;15 – 00;15;20;28
I’m sure that was a big like an emotional like it’s 6000. Here we go. You got over 6000. I think the biggest, biggest indicator will be tomorrow’s open. How do we open relative to this close here. Then we open lower and then and start moving back below 6000. If you do probably trigger stops and you start to get a little bit of a sell off.
00;15;21;01 – 00;15;29;13
I would agree. I guess the question is, do you go back to 5700? Right. 5800. What what would be the the next testing point? There you go.
00;15;29;15 – 00;15;50;28
Yeah. I mean it’s certainly possible probably should move this down. Just a hair. Yeah, it’s certainly possible. I’ll take a look at this on a little bit bigger time frame. There’s plenty of room for this thing to to break and still be in an uptrend. Right. I mean just call it what it is. And so you could take this bad boy down into here and still be in an uptrend.
00;15;51;01 – 00;16;08;12
Right. And what number is this again. Yeah 5800 okay. Let me just widen this out for the viewers. So yeah I mean it it certainly feels like it’s possible I don’t know if I’d want to be getting overly short just yet because remember we just I mean we just had this big election in the market. Liked it for better or worse.
00;16;08;12 – 00;16;27;01
I mean, I liked it. And so, you know, I think if you want to be short, I’d wait to see how this thing at least opens. You know where you’re out, right? It’s, you know, this high right here, 60, you know, 16 some and have some change. I’d be curious to see to like, let’s take a quick look at like a sense something like this.
00;16;27;04 – 00;16;47;08
What’s interesting about this is that this has had consistently and lower highs. So let’s do this. And then you can kind of I feel like infer this one to I don’t know if that one really counts, but we’ll use it anyways because my point is, is that as it does, it gradually declines. If this thing has a breakout, this is the this is the 5700 put.
00;16;47;10 – 00;17;00;29
You have a lot of room potentially to rally. I mean it’s this thing goes back to 507 clearly got overbought. But like if you start to deteriorate in some of these and then have a big tick pop like that could be super interesting to just that trade right there.
00;17;01;02 – 00;17;05;25
I guess looking at that chart though, it’s interesting. I mean that was back in August that you had that put. Right.
00;17;05;28 – 00;17;08;05
So it was it was an in the money option.
00;17;08;07 – 00;17;08;19
Okay.
00;17;08;21 – 00;17;24;18
All right. Yeah for sure. Yeah. So but it just to me when you start to see some of the like if you start to see some of those options like round itself out and you’ve had this like big downtrend kind of like when we looked at non inside we’re had big downtrend starts to go sideways. And that facilitates potential strength right.
00;17;24;21 – 00;17;40;10
So you know again great way to look at markets is still look at you know some of the lower delta options and see what people are doing with them in the chart. I just feel like they chart well when you start talking about 50 Delta and plus it’s it’s harder to chart. Or at least I feel like I just just look at the end of the line at that point.
00;17;40;12 – 00;17;40;26
Makes sense.
00;17;40;27 – 00;17;53;13
Yeah. This this opens lower tomorrow could get a little dicey. I guess the last thing I’ll say about it, too. It’s not like the S&P is rocking. We’ve been rocking all year. Yeah. You know you’ve had a big move I forget I think it’s north of 20% year to date.
00;17;53;16 – 00;17;55;23
And so it’s so strong.
00;17;55;25 – 00;18;04;21
Well but I mean you know to to retrace and go back to like a 15% gain. That’s still a banger year. It’s still great year for the S&P.
00;18;04;25 – 00;18;19;27
Well that is going to do it for any knife tech talk. We appreciate it. Everybody tuning in and watching. If anyone has any requests for next week please let us know. Tune in for book club. Sure. We’ll have a new book next week. If you have not already, please subscribe to the channel. Give us a thumbs up.
00;18;19;27 – 00;18;25;24
Tell everyone about us trying to get as many likes we can by the end of the year. We’re getting down to the nitty gritty here folks.
00;18;25;24 – 00;18;27;05
So down to the nitty gritty.
00;18;27;08 – 00;18;35;16
We’re making the push. We are making the push. But until next week, thank you for tuning in. Have a great week and even better weekend. See you next Tuesday.
00;18;35;19 – 00;18;39;14
So yeah. Are you going to do, are you going to do elf on the shelf this year?
00;18;39;16 – 00;18;40;28
Oh yeah. For the kids.
00;18;40;28 – 00;18;46;25
I should honestly get your house like a, you know, like, be the guy that, like, those elf on the shelf at home.
00;18;46;27 – 00;18;48;13
Well, Tommy and Susie. Imagine.
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The following music was used for this media project:
Music: Funky Intro 29 by TaigaSoundProd
Free download: https://filmmusic.io/song/9520-funky-…
License (CC BY 4.0): https://filmmusic.io/standard-license
Artist website: https://linktr.ee/taigasoundprod
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