In this episode of Tech Talk, Andy and Cody discuss spot butter, spot nonfat and class IV.
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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 Cody, he is Andy and coming back making a another appearance on TikTok. It was Crab Man from way back when.
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Crab man.
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Andy, how we doing?
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I’m good man.
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Are you glad to see we have an oldie but a goodie back on the show?
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Griffin want to be on the show today? G money, but he couldn’t be on. He’s at school so. Yeah. So grab man. Go on instead.
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So rock on. So we got three charts today. One of them came a request.
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One of them came a request. And so then we we tallied the other two charts around this request. We’ve got one all class for all the time. We’re going to look at butter then nonfat. So in the order that they’re traded. And then we’re going to look at class four futures which was the request. So you grow your beard up by the way it’s going on.
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We’re trying winter time man. You got to keep warm.
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Remember when you did I think I have a picture of you. We would like who you try to grow your hair out.
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Where I didn’t cut my hair for, like, I think it was three.
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Months, something like that. You can do that to it.
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Back where? No is what, 20 1819?
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Well then you like we all paid for you to get that, that extra nice haircut, like, let’s. Right. Whole shebang.
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It was glorious, man.
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All right, you can do that again.
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Now, that was that was a one and done type deal.
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All right, it’s a little bit of a heat wave going on, by the way. Just seen. I know it’s 35 degrees. When I was like, balmy today, I talked to our good friend Trevor Sluggers the other day, back when it was like -20, and he said, man, I thought it was cold when it was 30 degrees this morning out in California, the mod, Life of Trevor.
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What are you guys know, by the way, to I did talk to jazz school last week. Yeah, I’m begging him. We’re going to get him back on the show this year.
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We’re getting there.
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He hasn’t been on in like a couple of years now. So this is it. This is the year jazz is coming back. All right. But for now we got charts. So this is better. You and I looked at this a few weeks ago and I didn’t move anything. We look at this big Fibonacci retracement. This goes back to Covid times 110.
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Yeah lot of sport here at 250.
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A lot of support. So we had this big red support line right here at 250 basically that’s 249 and some change. And this is these lows from when we really broke hard and then climb back out of it over three bucks. I mean we’re this is dangerous. It’s just flirting with danger here. We basically went to that to that support level and have since struggled to break.
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Right. And we’re sitting right here right now at 250.
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So here’s an interesting one. What if we go like this. And what if we’re in the midst of like wave two right now and we do something like that? I know you would want to add 25% roughly to way too. So let’s just do that. Two bucks takes you right back down. I mean, that’s I didn’t I didn’t do the math on it precisely.
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But I mean, you want to extend it a little bit from the first wave, but that takes you down to a rough call around two bucks. I mean, that starts to be where I start to look at look at it, right. This was an area of traffic before. Try to get above it quickly, came right back down, tried to bounce, failed again.
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And once you get through that price man it was just lights out. We took off. Yeah that was back in 2021. Jeez. Yeah. So futures don’t seem to think so out forward though right I mean it’s two 70s two 80s all the way down.
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I was going to say you got to get a sell on below 249 two 48.5 to really start breaking this thing. I believe just like the chart shows, every time we get down to this 250 range, we’re just we cannot do it and.
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Not break through. And I think you have to be mindful too of all this consolidation. Right? I understand this is a big support level. It’s acting like it right now. I think this is just as important. And that say we break I think we run into traffic here getting through this low right here. What prices? 225 let’s just say a 220 settlement or lower.
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I’m just rounding right there. But getting us through that price, I think that just that gets dangerous because there’s not a lot I mean, the market really accelerated from 190 to that price. Yeah. Right. And then it gapped. So there’s not a lot of like technical like support there. You could be a quick kind of flash in the pan down to two bucks.
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That’s a huge move right. We’re talking about $0.50 from here. But I think the first step is you got to get below the support. We got to get a settle below 250. You got to get another open lower than that. Then we can talk about it. Until then it could just be trade sideways. I think in order to do that.
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First step is I think we have to really get some of this futures curve lower.
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Drop it.
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Yeah I agree I mean there’s a pretty healthy premium vector. Step one would have to be take out some of this premium. But hey you could take out that premium probably pretty quickly by closing at 248 and then opening lower after.
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Right.
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You could turn into a free fall there. So yeah. Oh this one’s interesting in this one’s interesting right ahead of Easter. Easter will be like right around the corner here. It’s coming up.
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Yeah. It’s going to be the next major holiday for mine.
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So what’s the Easter Bunny Mary news here I don’t know.
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Hopefully some chocolates.
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From chocolate. Like, are you like a, like a big bunny chocolate kind of person or do you want, like the little guys like drew?
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What are those? What are those eggs?
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Cadbury eggs look good.
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Those are good.
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Maybe you should have, like, a big Easter egg hunt this year. There you go. Just make sure that, like, the plastic ones and that, like, you know, real exit, you die. Because if you lose one. I think we did. I think that happened to us when we were kids, this little nasty. We lost one and found it a few weeks later.
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It’s a little gross. All right. Next one. Powder. What do you think your boss looks like?
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Nonfat. Starting to roll over a little bit here on spot. We get to lower and, Yeesh.
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You’re talking about right there.
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Right there. Yep, yep.
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It’s tough to ignore. I mean, a few things here, right? So this is a 200 period average, meaning this is a weekly chart. And so it’s the last 200 weeks. We just opened below that price. That hurts. And what I find interesting too is that even though when you just look at the chart itself, you just look at this price action right here, it looks pretty sideways, doesn’t it?
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What sticks out to me is right here. So you had all this consolidation but the momentum just slowly it started to drift down. And now I mean it crossed zero back in July meaning it went from negative to positive momentum back in July. So talking about close to eight months that we’ve been in positive momentum territory to go negative like that.
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That’s a nasty little warning sign right there. Right. Especially with I mean gosh this is like okay this is your chart right here. Man one gap.
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There’s a lot of gap on the way down to $1.24.
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The three gaps. Oh my gosh gaps galore. Yeah we already filled this one. So you can’t make that one’s gone right. But I guess I don’t know if let’s say we do roll over. Here’s one to be mindful of two on the way back up. But yeah this this could get a little bit dicey. It’s a big move.
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If we were to go, let’s say we follow these three and go back to this level support. You’re talking about like 125 something. I will say it’s parallel to this is way is starting to roll over. Right. You know I think the back of the envelope math is not that should be approximately three times the price of ways of ways good at $0.70 nonfat.
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Sure should be good at $1.30. Obviously you can have these discrepancies. Right?
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Right.
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That would be a really big secondary like kind of confirmation if you will. Inter market analysis. If whey starts to roll over Nance that’s in trouble.
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Yeah. It could kind of lead the way into more of a bearish nonfat chart. There. See how it ended there.
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I did grab me and loved it by the way I keep them coming. Well play. All right. So I think you and I are in agreeance if that’s even a word I think it is. We’ve got gaps galore. We could roll over here. You’ve got warning signs we retrace. A third of this move failed to really continue going gaps lower here.
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That’s all a sign of weakness. Plus settle below the 200 period average on a weekly basis. And you’ve got one, two, three gaps here. It’s just what we look at at butter. When the market really accelerates, there’s not that much technical support. If it starts to break. Like you can see the same level of acceleration down here. Great.
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So yeah I think the thing that really cracks it to your point leads the way is if we start to rollover. So that could be something that keeps us supported. It’s like NASA for example. And you BSR it doesn’t break or we’ll see. Last but certainly not least, you had a gentleman.
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I had a good friend, Dane from Washington wanted to see class four, which is why we started with the components of class four.
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So this is March class four. Yeah. What do you think of us?
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I mean, every time we get down to, you know, it was $20.50, we kind of saw a little bit of a rally with all these class four contracts. Obviously, this is not quite the same. We’ve broken down, what, 220. But it feels like when you said if nonfat starts rolling over in, kind of gets a little bit more bearish than obviously class four is going to have a pullback.
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On what happens if butter sustains our 250 number and we rally back to 260. I think you got to be very mindful of do we settle below $19 in class four up front here I don’t know I don’t think so. That would be a big correction in butter and nonfat. Correct. And also looking at the secondaries like the RSI and the momentum.
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And I know you got the momentum right there too. Yeah I mean these were definitely it looks to be in the RSI and oversold territory right now.
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Yeah I mean you hit the nail on the head I think they’re it’s interesting that we just looked at spot right. And spot was showing that momentum was about to cross into negative territory. Whereas class four it’s been negative for a while. Right. And actually getting to a point here point oversold I drew in here this 20.5 level.
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It’s a price where we bounced once twice but not thrice right. And so like that little how often you get to use the word thrice.
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Not often. Not very many people know that word. I always like when I hear it because, you know, three times.
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Right? How many times did Achilles drag Hector around Troy?
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Thrice.
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Yeah. Okay. Okay, put that on the reading list. A little classical reading for you. So what’s interesting here is that you broke this 20.5. There’s conflicting arguments here. The secondary stuff is saying, be careful of this break, but you’ve got a downtrend that’s held. It was basically turning into a descending triangle, meaning it was bumping up against a horizontal line and descending and broke through that.
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So I guess the question is, does it maintain this breakout and continue? One thing I will say is that this market, obviously, with its liquidity issues, sometimes can bounce around quite a bit. I think you have to ignore anything that trades in between here, which is a big price point. But if it breaks this downward trend, you could be in trouble with shorts.
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You probably want to liquidate, because that would also mean its momentum would turn badly pretty close. So I think at the very least, if you’re looking to do something here, you could probably be long, but I’d love to see more confirmation on the secondary stuff. You know, like you said, you broke support. You’ve held this downtrend. You’re under the 200 day.
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That’s cause to get short. Just have.
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Yeah. But you said instead of being short futures here I think I’d rather be long puts. Just in the case of every time we get down to this price range I mean we finally got below 250. I don’t know if it’s gonna hang out here very long.
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Well, the other piece of it here, I just check current cash is basically 20 bucks.
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Right.
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And we’re right here. And so you’re saying there’s going to be no premiums and butter. There’s going to be no premiums and nonfat. Correct. Maybe. I mean it’s a tough one, but we’ll see either way. Like the technicals at least chart patterns are saying you picked. It’s warranted being short the secondary stuff and the fact that we’re not even a premium to current cash, that’s tough.
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One of these to be short flat price approached by puts or something like that. Call it a day. Right. So but we love the requests.
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We do. Thank you. Damn. The request for class four. We don’t get very many class for requests, so that’s always good to take a peek at.
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We love the requests. Keep on going.
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Even government Cuban government. Well that’s going to do it for our three charts on tick Tock this week. Again we appreciate them. Actually emailed me on this one last week after we saw last week’s episode.
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And we’re working on getting our subscriptions up. Subscribers. That’s right. So you’re getting a tattoo. If we get to 10,000 or something, right.
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We’re getting there. We’re trying we’re trying our best.
00;10;57;25 – 00;10;59;27
You’re going to get TikTok for life or something like that, or.
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Oh, that was last year. Well, we’ll see what this year’s brings about, where.
00;11;03;01 – 00;11;09;16
Maybe we can do a poll of like what what, what what tattoo code. You should get 10,000 subscribers. Let I go grab it.
00;11;09;23 – 00;11;23;19
All right. Well, buddy, appreciate all the insight on the charts, everyone. Thank you for tuning in. If you have not already, please subscribe to the channel. Give us a thumbs up. We greatly appreciate it. And with that we will see you guys next week. Thanks! Tune in.
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Next week.
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