Capesize
June Futures – We noted last week that although technically bullish the futures were trading with a USD 15,446 carry, meaning that we needed to see positive numbers from the index, otherwise the upside moves would be unsustainable. For this reason, although technically bullish the futures were not considered to be a technical buy. The Index has moved higher alongside the futures with the disparity reaching an all time high of USD 16,583 on the close on the 04/05/22. The paper remains supported as the carry has now narrowed to 12,088, significantly the RSI on the index has moved above the 64, a level which has previously been a bullish signal for the index. The futures are above all key moving averages supported by the RSI above 50, the new high on the RSI and well-spaced averages would suggest does side moves have the potential to be countertrend. Countering the bull argument is the intraday RSI which is now in divergence on the 1 and 4-hour timeframes, not a sell signal it is warning that we could enter a corrective phase soon. This will need to be monitored. Technically bullish and in trend with near-term resistance at USD 42,020, USD 43,687, with the potential to trade as high as USD 45,354 within this phase. Downside moves below USD 36,500 will indicate that the intraday futures have entered a corrective phase, making USD 27,032 the key level to follow, as the technical is bullish above this level and neutral below.
Panamax
June Futures – The futures continue to move higher with price above all key moving averages supported by the RSI above 50. Using Elliott wave analysis on the intraday futures on the move that started from the low on the 26/04/22, we can see that price has entered a bullish impulse wave 5 of this phase. The intraday futures have produced a negative divergence with the RSI, meaning we could see a momentum slowdown (note: the new high means the minimum requirement for phase completion has now been achieved); however, using the William’s approach we have a potential upside target for this phase of the cycle potentially as high as USD 31,965. Downside moves that trade below USD 28,875 will mean that the futures have entered a corrective phase, making key support to follow at USD 26,620; corrective moves lower that hold at or above this level will support a bull argument, below this level the futures will have a neutral bias. On the daily technical, key resistance is still at USD 33,625, upside moves above this level would suggest we will have entered a bullish wave 5 on the higher timeframe chart, warning the USD 41,550 high could come under pressure.
Supramax
June Futures – We are seeing a separation on the intraday moving averages suggesting we are in the early stages of a bullish trending environment with the futures trading above the USD 33,250 fractal resistance, meaning we target the USD 36,00 – USD 38,000 resistance zone. Above this level would suggest that the futures are in a bullish impulse move, warning the USD 42,250 high could be tested. Downside moves below USD 33,200 will warn that the intraday technical is weakening, leaving the USD 30,750 and USD 28,250 levels vulnerable. Near-term price action is bullish but the longer-term technical continues to have a neutral bias.
Oil
July Futures – We continue to lack any form of real trend in the futures. Price did move higher despite the strong USD basket, warning that we had the potential to see a bullish breakout above USD 114.84. However, the recent upside move only traded as high as USD 114.00 before producing a technical pullback. If we trade above the USD 114.00 high of the rejection candle from 05/05/22 then we should in theory see the USD 114.84 fractal resistance come under pressure, if it is broken, we target the USD 123.74 resistance. The daily EMA support band remains flat indicating a lack of trend (support band USD 107.67 – USD 104.61), despite the flat averages they are still acting as a support zone making it a dangerous area to go short. Downside moves that trade below the USD 97.57 – USD 96.93 fractal supports will warn that the USD 90.12 level could be broken. This technical is neutral and looks to be forming a symmetrical triangle as it lacks direction; however, near-term price action is warning the support band could be tested.
Iron Ore
June Futures – As noted on the May futures upside moves were likely to find technical sellers, the futures did trade to a high of USD 147.10 before trading to new lows today (09/05). The June futures are following the same technical footprint with price trading below the USD 132.40 fractal support to a low of USD 125.40, lower highs and lower lows on the daily chart support a bearish argument. The RSI has traded to a new low on the daily chart again supporting a bearish argument. Upside moves that fail at or below USD 140.02 will warn the futures are vulnerable to further test to the downside, above this level the technical will have a neutral bias. The downside push in the momentum indicators is warning that the wave cycle could be extending lower, we had noted in the May contract an underlying strength in the market based on the previous upside move; however, based on the intraday technical in June, it looks like resistance levels (USD 133.89, USD 136.48, and USD 140.02) could hold if tested in the near-term.
Steel
June Futures – having previously noted that the May futures had entered bearish territory the June contract continued in the same theme. Price has traded to a low of USD 1,170, within USD 1.00 of our key support level. If we hold this level, it will support a bull argument for a longer-term Elliott wave cycle; however, if support is broken then the USD 1,086 and USD 9,47 support levels could come under pressure. Upside moves that fail at or below USD 1,455 will leave the futures vulnerable to further tests to the downside, above this level the futures will have a neutral bias. The technical has held key support but remains bearish and vulnerable to further tests to the downside at this point.
Tanker TD3
June Futures – Technically bullish with price testing key support, the RSI is above 50 and the stochastic oversold, momentum had warned that the futures were vulnerable to a test to the upside; however, if the RSI moved below 50 then and price below 9.5481 then we could expect support levels to come under pressure. The price moved lower; the May contract now has a neutral bias. We are seeing a similar technical footprint in the June contract; a deep pullback means the futures have a neutral bias. Price is below all key moving averages supported by the RSI below 50, upside moves that fail at or below USD 10.9054 will warn the futures are vulnerable to further tests to the downside, above this level we target the USD 11.8210 high. Likewise, a close below USD 9.0323 will warn that the USD 8.2730 support could be tested. The slope of the moving average on the RSI is to the downside, suggesting resistance levels (USD 10.1567, USD 10.4745, and USD 10.9054) should hold in the near term if tested. Note: a strong upside move in the RSI could change the slope to bullish on the RSI, meaning resistance levels could hold initially but find buying support at lower levels technically neutral.
Coking Coal
June Futures – Momentum had warned that May support levels could come under pressure on the last report; however, the price held the key USD 433 level to trade back to a high of USD 525. The June futures have produced a deep pullback followed by a deep upside move into the last bear wave, meaning the technical is neutral based on price. Near-term price action is bullish following a series of higher highs and higher lows, but the upside move remains within the last bear wave down. We now have a small 5-wave pattern higher, warning the futures have the potential to exhaust. Downside moves below USD 425 will warn the USD 373 and USD 348 support levels could be tested. Likewise, upside moves above USD 495 will warn the USD 535 high could be tested. The RSI is bullish but showing a small negative divergence whilst the stochastic is overbought, alongside the small 5-wave pattern is a warning sign that we have the potential to see a technical pullback. Technically neutral with some warning signs coming into play.