In this episode of Tech Talk, Andy and Cody discuss the block, the barrel, the dollar index 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 have Paige in the background. Together. We make up the tech talk trio and we are coming to you live from the sunny state of Florida this week.
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Live from Florida.
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Hey dude.
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I’m doing well. How are you?
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I’m doing well.
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I’m waiting for you to have, like, you know, like a little cup with, like, an umbrella and stuff like that.
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And I figure out a way to laugh.
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What’s your favorite, like, Floridian drink of choice?
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Oh, man. I have to say, my tie.
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My time.
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I asked if we could do the show from the pool if you said no.
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Oh, yeah. Thanks, Paige. We could have been poolside with Cody.
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Could have.
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Been. Do you wear sunscreen, by the way?
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I have to.
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You have to.
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Necessities. But. But needless to say, we’ve got three charts. One of them came from a request at one of our very good listeners.
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Super excited for that one, because it was actually a last minute request. We were getting ready. We had something else we took we took something off the docket in order to accommodate the request. That’s how good. Let’s set this up at people.
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We are at how important this guy is to us.
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Yeah, exactly. We’re here. We’re here to help the other two charts. They’ve been in the news big time here recently. Let’s start with the block. So the first two charts we’re going to do normally we look at the cheese average but instead of individual charts. Right. But in this case we’ve had some pretty significant divergence between the block and the barrel.
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Right. I mean, the block especially. So this is the block.
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Yep.
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It puttered around. We had all that. We had all that noise. I mean that’s you know, like.
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At $1.90.
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Yeah I mean like the plus or minus, you know whatever it was. Right. So it got above $1.80 and looks like this is the middle of December of last year. And it just bounced around. Remember all that volatility we had until it seemed like at the turn of the new month, we saw it. We saw some pretty significant weakness.
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So even though this is weakening to 28, a lot of that came on that Friday. Last rider and then this was this is the first couple of days of this week. So this is we haven’t seen cash today as of this chart. This is Wednesday. Right. So this is basically Monday. Tuesday sessions. But if we were to close here you would obviously let’s just draw this bad boy.
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I mean you’d be into new lows from all this consolidation. We haven’t seen a price like this since going back to April. So I think the question is, do we actually sustain this price level or do we see some kind of a bounce. Right. I mean, we’ve we’ve got some we’ve now have created some pretty nice little gaps here.
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Right. Right here to here. Even if we went and filled this gap futures are saying will be higher than that. So there’s still a nice little premium they tend to like you know April cheese at 176 I know that’s an average. And I’ll make cheese at 178. So those futures are same. You know on average cheese is going to be more like around here.
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Correct.
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So we’ll see whether or not the block can actually stick this close. And we had an interesting I know it’s like here today gone and here today gone tomorrow with tariffs. It’s like.
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Yeah.
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You know it’s like Bill Shakespeare right to tariff or to not the tariff. That is the question. Who knows.
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Put them on take I.
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Mean come on take a.
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Hold on. And we knew the ramifications of the awesome I mean, it would still be terrible, but at least we know for sure they keep getting put off and taken or put on and taken off every single day. And it is like the chart just shows the volatility in these markets is wild.
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Who knows. And you know, we I think fundamentally we can all agree that we are feeling some weakness now with something like the new plants coming online where I was, you know, and we got the Super Bowl and yada yada yada. Right. But again technically speaking we could just never get that close higher than this price level, right?
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I mean, we tried again failed. And once we failed, it just turned into almost like a big M.
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Yeah, exactly.
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Yeah. The question is, can we stick this call this, even if we didn’t do anything for the rest of the week this would be a really bearish blows for the week because now you’re in a new lows for this move.
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Speaking of the M, if we close right here, don’t you think that would complete the whole the M circuit that you’re talking about.
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Not necessarily know because not necessarily because you have you still had some room like the next I’d say technical support area is $1.50. Right. And so if you got through all this noise here right. This I think is the big area where it’s like you should be if you were to complete an M, you’d be going to that area and, and bouncing and coming back and consolidating.
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Okay. On a small scale, like when you said small M I was looking from when we started in December until now. That’s the timeframe I was looking at.
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You’re looking at like lowercase M’s. I’m up to capital ohms.
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There you go.
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We’re learn about capital letters in first grade right now. So anyways yeah I mean to me it’s again stick this close. I think that’s the biggest though right? I mean last time buyers could pay this price. Still a long time. Yeah. So I would imagine you’re probably going to get some folks that are off exchange are going to say, I’ll take this price regardless of what goes on tariff wise.
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Remember, we’re cheap with respect. There is the world at $1.60.
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Sure. Yeah.
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Agreed the GTI, I believe printing approximately, what, 220?
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Yes. Recently? Yep. Yesterday.
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That’s cheap with respect to just globally, I know that there’s a lot of geopolitical things going on and what else. So again, I think what ends up happening here is we’re going to test the sellers here whether or not they can actually sustain this price. If we can’t get a close below here, I gotta think you take a shot at filling this gap.
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I agree.
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It’s a big wait for the block.
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And it is a big week. It is a big week because like you said, if not where you have that red line, the dollar 50 is going to be the next testing area.
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We’ll see. So all right next one. Again we always tend to look at them as an average. We’re breaking them up this week breaking it up.
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Break it up breaking them up.
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Cody’s in Florida. Dogs and cats living together. Total chaos. You know what’s actually interesting about that comment by the way page has a dog and a cat I know. And they do live together in harmony. In harmony.
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This show is weirder and weirder.
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Just wild. All right, barrel, this is the 200. We always have the 200, period. This is like 200 weekly average, right? So people can usually like a, simple moving average for a daily. This is 200 weeks. And what’s interesting is that we got the close below it last week. Right. It was super small, but we did get a close.
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And then we got a confirmation this week.
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Yep.
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So you know here we are. This like if you can stick this close just like a block, if the barrel does nothing all week, that this is a sign of weakness because you could see like, you know, we thought like you gap below it filled it here and took off. Tried to at least. And it’s now trying to break this here.
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Right. So you have this you have this area that’s clearly let’s just circle it real fast. This is an area where the market doesn’t like to be for long. Right. It created it seems like anytime it gets up around this price, they’re small but they make gaps. The gaps away from those prices.
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Yeah.
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175 basically. Great. So if we can stick this close then I think it’s I think the market can be in trouble here. You know dollars.
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60.
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I think you got to go consider testing that price. So right time of the year right. I mean again we just got out of the Super Bowl. You get the flush kind of thing.
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Looking at your RSI. It’s not it’s not into oversold or oversold territory is just kind of hanging out there.
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Yeah it’s definitely rounding down. Yeah. Right. The interesting one is that the momentum stopped and it’s actually trending back up which is I think super interesting there. It’s it’s you got to be mindful of that one. Maybe we see convergence between the block in the barrel and you know the block perks back up as sales probably start to pick up around $1.60.
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You know, do we see business at $1.73 75 in the barrel. We’ll see I know. But again technically speaking this is a price where this market doesn’t like to be at. I mean look at Larson here. Took off here. Gapped down bounced. So this dollar 75 area is such a big area for this market.
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It’s where if the market is going to accelerate it’s going to do it from this area that we’re seeing correct. Correct. Correct.
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Yeah. So this is an interesting one. And again I’m glad that we look at the two separate charts because in a lot of times you see them trading not in unison but in in walks $0.03 premium to the barrel or something like, you know, or they’re close. But in this case there are two separate charts there.
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Let me see this on this chart right here. Just looking at it for the barrel, would you say we hit 1/91 or 160.
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I have to say 160. It’s a great question. Let’s look at it from like this standpoint. What does that look like to you.
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That looks like right there It looks like we’re going to go form another leg for a.
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I was going to say it looks like the beginning of like, you know, wave two.
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Right there. I see you’re saying so the.
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Fact that it’s failed to, to to materialize on that. Right. So if you just look at it here, it looks like, you know, here’s wave one. Wave to wave three would take you back up into here.
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Yep.
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But like you just didn’t get that. Assuming we close here this week.
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Right?
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Right. Do nothing for the rest of the week. Close here. You failed to make that second wave. Yep. Actually there we go.
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Yeah I see.
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That’s that to me is is a failure to to materialize that pattern. So that’s why you know that’s why I would say 160 before 190. But if we’re going to go trade 190 I think you have to go trade 160.
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I’d agree that that’s why I asked. I want to see if we’re on the same page there because I completely agree with that.
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Yeah. I think if we can’t and we kind of go back into this range bound stuff that we saw over the last like six weeks, two things will happen. I’ll probably lose like three years off of my life. Yeah. And then, you know, we it’ll struggle to get like any sort of material rally towards the latter part of the year.
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I feel like so.
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Yeah we’ll see.
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But yeah this looks it’s interesting. This is two separate charts. Again, we usually look at it from an average standpoint, but I feel like it’s worth looking at because they’ve made such a big move. Like you know, they moved away from each other quite a bit. They have. All right. So last chart came at request from was go Phil.
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Wish go Phil are good for he.
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Want their good friend. Let’s go Phil he wants to see the dollar index. Obviously a big you know big component of our ability to export. Well I guess import and export right. So let’s not just talk about exports. Oh there’s imports to. All right. What do you think here.
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Well so I’ve got 200 day moving average which what do you have. You have the.
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I have the 200 day. But this is a weekly versus the weekly.
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Oh boy. Doesn’t look bullish. I mean, nothing that we’ve seen on a weekly chart right here. Looks bullish.
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All right. Here we go.
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Do you think that the supportive line at 104.
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I think you could argue that this was a nice channel. That this stayed in for a long time. This is two 2023 broke out at the end of the last year. And you had some false breakouts. And when they, you know, when they bought, when they had the false breakout, they came back to, to the end, to the, to the tail end of the channel came back.
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And so I think this next the like the fact that we’re, it’s just like what we looked at with the block in the zero.
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It’s only Tuesday or Wednesday the day. And so.
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Wednesday.
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Wednesday morning, Wednesday all day today.
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All.
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Day. But even if we if we did nothing for the rest of the week and close here, you would you would reject this breakout and you’d be back in this channel. If that’s the case, I think you got to go back and test the lower end of it. At the very least, you’d have room to come down and test this 200 period.
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Moving average momentum is certainly telling you that that’s what’s going to happen, right? I mean, if you just look at this for a hot second here, that thing, it broke the uptrend. It was on right.
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Very hard. Yeah.
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And then RSI tried to get overbought came back down and has a ton of room to go lower.
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So yeah.
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So this is clearly pointing down. And same thing I mean you can you mean you can make literally the same argument. But it was trending I mean where you want to you know draw the trend is anyone’s guess. I mean I’d probably be more like this. And it broke and had now has plenty of room to break. Right, right.
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So yeah, I think at the very least the fact that it’s getting back in this channel. So it’s got to go down to test 100.
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I would agree. I mean, nothing about just looking at it tells me that it’s bullish. I think you got to go down test that that got to go down support.
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What a key area for that by the way.
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I know I know.
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I mean it’s like could you imagine if we broke 100 and actually sustain break after making multiple attempts to get past it.
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Right. Yeah. Where does that starts in 20 in middle of 2022.
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Right here.
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Well right before but I guess you know where we’ve kind of found support there for a second at 100.
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So yeah it’s me. It’s I think you got a good test 200 I think if we get this close and go back in this channel you’ve got to go back and test 200. I drew it here by the way rather than here because I feel like this is where it started. This is where it had bounced and then, you know, started actually going sideways.
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Okay. I’m choosing to go here and just saying these are false breakouts. So if you were to go here and there’s a little bit more of a a conservative approach, because here it’s clearly already broken through it.
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Right? Yeah.
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So I think you have to be a little bit more conservative and say this is where this channel actually started. So that’s a good.
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Good point.
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Last one, but certainly not least I feel like this is going to be a surprise chart. This is the S&P 500. The March piano march goes up soon I mean we can certainly look at June if you want. But it’s it’s I’m sure it’s going look yeah I don’t look much different. So I’ll go back to March because it’s a little bit more.
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Yeah. There we go. Not looking hot.
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You’re not looking good.
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I mean the macroeconomic stuff, the wealth effect I think it’s a big deal. You know we’ve seen dairy respond when you have these big sell offs like here I remember was a big day like dairy sold all commodity sold off. And yeah similar to like here that was I believe last Friday. And then nope this was Friday. Excuse me.
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Here. So that was on Monday. Tuesday. Here’s today’s session. This looks weak I mean like I’ve had this you know, we’ve had this long term trend for a while and you finally broken through it. Just broken through it. You’ve confirmed the breakout. You’ve also completely engulfed an attempt to get back into the breakout. Like look at that. Yeah.
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Right there. We’re going to try again here. Nope. Not today. Did not happen.
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And 5100 is going to be a big.
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Big number.
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Support line if you break through that. Good night.
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Stocks are I mean they’ve been on a tear for a long time. I mean this is a weekly this is a monthly. I mean this is you’ve got this just huge I mean, you can retrace you could you go down to 5000, you could and you’re, you’re, you’re having, you know, I mean, depending on where you want to have this thing really stark.
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Right? I mean, you could argue that it started all the way back here very long time ago. I remember there was a floor. There’s a guy in the dairy vid. I remember him talking about wanting to own stocks, like right around here. Remember him talking about that? That was just like. So at any rate, this looks I mean, the whole thing, I don’t know.
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I’m not a stock market expert by any means. Near my eye, I think you got to be really mindful of this market, the macroeconomic effect, the wealth effect, etc. and the fact that we just broke a long term uptrend.
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Right.
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We’ll see.
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It’s a good chart I appreciate it.
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I wanted to tariff or it’s not the tariff. That is a question that could be a good title. Maybe for a book someday.
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I feel like we’re going to get the question and the answer to that many times this week. And it’s only Wednesday.
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It’s only Wednesday, and you’re going to be poolside here pretty soon. Yeah, cats and dogs living together. Total chaos. Cody poolside.
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Well, that is going to do it for this episode of Tech Talk. We appreciate everyone watching. If you have not yet, please subscribe to the channel. Give us a thumbs up. Hit that notification bell. We appreciate a good friend. We Phil West Wescott through with one of the best charts as he usually does. Hopefully we did it some just last minute.
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I mean, like it was literally if we if it had been ten minutes later, we’re here when I got it in there.
00;16;05;18 – 00;16;18;08
But if anyone else has any request, just like it was call fielded, please shoot us an email, give us a call and we will be happy to look at it on next week’s episode of Tech Talk, where I will be back in the snowy tundra of Michigan for usual care, and.
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She’s actually supposed to get a bunch of snow this week.
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Yeah, I just get hammered with snow, I think. So that’s going.
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To be just to get a dusting today here.
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I’m really look at Austin. Appreciate you bringing that up but.
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No problem.
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With that everyone thanks for watching. Have a great rest of the week. Have a better weekend. We’ll see you next time.
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Bye.
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