Capes
February futures- As noted last week the bear trend remains stable with the engulfing pattern signalling a potential short-term upside move, key resistance was at USD 14,750. The upside move failed to hold with the Futures trading to a low of USD 10,500, bringing fractal resistance down to USD 14,750, above this level the technical is bullish based on price. The trend remains technically bearish, but price is moving higher on an intraday positive divergence, this is not a buy signal, it is a warning of the potential for a momentum slow down. The longer-term moving averages remain well spaced supporting a stable trend, as previously highlighted the 5-year average value of the rolling front month contract tends to base in the first week of Feb. The technical is bearish with the futures in trend, however we are now in the last week of January with the series or bullish divergencies on the intraday technical, warning that downside momentum could soon slowdown in line with the seasonality chart.
Panamax
February futures- We had a strong upside move last week after the Indonesian export ban on Coal was lifted, the intraday technical remains bearish but the strength of the upside move means there is a neutral bias in the market. Friday’s downside move held above the key level supporting a bull argument but the technical itself will need to trade above USD 22,500 to create a higher high in the market. Intraday Elliott wave analysis is warning that we have the potential for another test to the downside; however, this is based on a psychological footprint of the market and is now considered less reliable due to the lifting of the export ban. If we do trade below the USD 16,425 low, then we could produce further positive divergences between momentum and price, suggesting downside moves could be limited. As noted last week based on the 5-year average seasonality chart, price tends to base around the 29th of Jan. Technically bearish, we are still vulnerable to one final test to the downside; however, questions are being asked about the validity off the Elliot wave due to the lifting off the ban.
Supramax
February futures- As noted last week the new low had resulted in a positive divergence with the RSI, not a buy signal it is a warning of the potential for a momentum slow down. Price did move lower for a further two days before rallying alongside the Panamax on the back of the lifting of the export ban. Key fractal resistance remains unchanged at USD 24,250, only above this level is the daily technical considered as bullish. From an intraday Elliott wave perspective, we have the same issue as the Panamax, the cycle would suggest there is one more move to the downside, however the lifting of the export ban changes the fundamental and brings into question the psychological footprint of the market. Upside moves that fail at or below USD 21,929 will leave the technical vulnerable to a further test to the downside. We are technically bearish, with key resistance at USD 21,929, our analysis would suggest another downside move but like the Panamax the validity of the cycle is in question due to the changing fundamental.
Oil
March futures- We remain bullish on the longer term technical based on our Elliott wave analysis as this would suggest that downside move should be considered as countertrend. Corrective moves lower that hold at or above USD 76.15 will support a bull argument, below this level the pullback is considered as deep and the technical phase neutral. The intraday futures look to be entering a complex corrective phase, a downside move below USD 85.71 will warn that we have the potential to test the USD 81.78 Fibonacci support. Geopolitical events would also support our Elliot wave analysis that this move to the downside should be considered countertrend.
Ore
February futures- The downside move last week held above our key support at USD 121.44 keeping the technical in bull territory. Our wave analysis had suggested that we had seen cycle completion; however, the upside move above USD 134. 15 indicated that we were witnessing some form of wave extension, meaning our initial analysis was incorrect. On the daily technical we re-evaluated and targeted USD 142.65 As a key resistance for the current bull wave. The futures traded to a high of USD 141.4 before retracing USD 7.00, the technical remains bullish above USD 128.96 and neutral bullish below this level. Only below USD 122.55 will the futures have made a lower low and be bearish. The intraday technical has pulled back on a negative divergence, however the RSI is above 50 with the stochastic in oversold territory, intraday momentum is warning the technical is vulnerable to a test to the upside, providing the RSI holds above 50. The Elliot wave cycle to the upside is unclear which opens the possibility that this upside move he is part of a larger corrective phase that is linked to the sell off from May 2021. We highlight this as the weekly RSI is at 49 whilst the weekly stochastic is overbought, if the RSI fails to go above and hold above 50, then we have the potential to see a higher time frame Corrective phase.
Steel
February futures- As noted last week we had a Fibonacci overlap between USD 1,214 and USD 1,212 Which also looked to be part of a bullish Gartley pattern. Technically little has changed price is only just trading below this support zone, meaning the Gartley pattern is still in play, this could still have bullish implications going forward. The trend is technically bearish with the daily RSI making a new low; however, the intraday RSI is in divergence warning that we have the potential to see a momentum slowdown. Technically bearish but not considered a technical sell at this point, as a bullish pattern is also supported by the intraday divergence.
Tanker TD3C
February futures- The futures remain technically bearish and in trend with prices moving lower over the week, downside moves below USD 7.3260 will target the USD 7.0000 – UD 6.8000 support zone. Upside moves that fail at or below USD 8.1517 remain vulnerable two further tests to the downside, above this level the futures will target the USD 8.7450 fractal resistance. Price is below all key moving averages supported by the RSI below 50, suggesting the USD 7.3260 and USD 7.0000 support levels could be tested.
Coking Coal
As noted last week the futures were technically bullish and in trend with the MACD making a new high, this supported a bull argument and suggested that downside moves should be considered as countertrend. We also noted that the longer period moving averages (30-60) had started to fan, suggesting the trend was stable. There has been no technical pullback with the futures continuing to move higher, resistance is unchanged at USD 468, USD 489, and USD 512. Elliot wave analysis would suggest we are on a bullish impulse wave 3 which supports downside moves being considered as countertrend. Fibonacci support is at USD 359, USD 334, and USD 300, corrective moves that hold at or above USD 300 will support a bull argument, below this level the market will have a neutral bias based on the depth of the pullback.