Capesize
September Futures – We noted on the last report that the futures were technically bullish based on higher highs and higher lows; however, with the RSI at 50 and the stochastic overbought, momentum was warning that if the RSI moved below 50, we could be vulnerable to a test to the downside. The RSI failed to hold with the futures trading to a low of USD 16,250. The technical remains bearish with price below the 8-21 period EMA’s whilst the RSI remains below 50, supporting a bearish argument. The new low has created a positive divergence with the RSI resulting in a small move to the upside. Momentum is now slowing down, warning we have the potential to form a base around these levels. Downside moves below the USD 16,250 low will create further intraday divergences, meaning the futures, although bearish, are not considered a technical sell at this point. Upside moves above USD 22,125 will have bullish implications as we advance.
Panamax
September futures – On the last report, we noted that the futures looked to have completed the bearish wave 3, suggesting that upside moves should be considered a countertrend. In part, we were correct; the upside move was a countertrend move; however, with the price only trading to a high of USD 20,575, it would suggest that the upside move was not high enough in price or long enough in time for it to be the higher timeframe wave 4 that we were expecting. This would suggest we witnessed further wave extension in the bearish Elliott wave 3. The Downside move has made a new low (USD 16,500), creating a second positive divergence with the daily and intraday RSI. Technically bearish with the futures giving up early gains into the close, we do have the potential to trade as low as USD 13,375 within this phase of the cycle; however, our wave analysis does confirm that we are on a wave 5 of a higher timeframe wave 3, with the divergence suggesting we have potentially already completed this phase of the bear cycle. Upside moves will still be considered countertrends, with the futures remaining vulnerable below USD 25,657, meaning a fractal break above USD 20,575, although bullish based on a higher high, would still be part of a more significant countertrend move. Technically bearish but not considered a technical sell at this point.
Supramax
September futures – Technically bearish with upside moves considered countertrend on the last report, the futures looked like they might trade above the USD 25,500 resistance. However, the price stalled at USD 24,600 before trading to a new low. We now have a positive divergence on the daily technical warning of the potential for a momentum slowdown; however, the intraday RSI is making new lows, suggesting any move higher still has the potential to be a countertrend. Upside moves that fail at or below USD 22,120 will leave the futures vulnerable to further tests to the downside. Above this level, the technical will have a neutral bias. Only above USD 24,600 will the futures confirm that we are in a higher timeframe wave 4. Technically bearish, we maintain our view that upside moves are still considered countertrend.
Oil
October futures – The 5-waves lower on the last report suggested we were on an extended wave 3, meaning upside moves should be considered countertrend. We highlighted USD 111.60 as crucial resistance, as the technical would have a neutral bias above this level. In contrast, failure to trade above this level would leave the futures vulnerable to further tests to the downside. The futures traded to a high of USD 110.67 before trading to a low of USD 92,78. Our initial downside target of USD 86.37 was based on the USD 105.34 high (see report 18/07). However, this has been revised higher to USD 91.65 based on the deeper pullback. Lower timeframe wave analysis (starting from 29/07) has now produced a 5-wave to the downisde, suggesting we have potentially seen phase completion. There is still the possibility that this wave 5 could extend, with upside moves that fail at or below USD 104.59, leaving the futures vulnerable to further tests to the downside. However, based on the wave analysis in front of us, it would suggest that the futures are no longer considered a technical sell at this point, with resistance levels now looking vulnerable (USD 99.61, USD 101.72, and USD 104.59).
Iron Ore
September futures -Technically bearish but in divergence last time, the futures traded above the USD 108.86 and the USD 115.75 resistance levels, meaning the technical is now bullish based on price making a higher high. Based on our longer-term Elliott wave cycle from the high at USD 233.75, we now look to have completed wave 3 of wave C that started in March 2022, meaning the current upside move is still considered a countertrend. Key resistance levels to follow are USD 121.10 and USD 129.92. Upside moves that fail at or below the secondary resistance will leave the futures vulnerable to further tests to the downside. Above this level, the technical will have a neutral bias. The recent downside move has held the USD 104.25 support, meaning near-term price action is bullish; however, the longer-term technical would suggest that the upside move is countertrend as the wave analysis still implies further downside within this cycle.
Steel
September futures – Technically bearish but not considered a technical sell previously, the futures closed above the USD 830 level, warning that the USD 890 resistance could be tested in the near-term (report 18/07). The price traded to a high of USD 890 before trading to a new low at USD 812. The new low has created a positive divergence with the RSI, which is above its moving average, suggesting the USD 890 high is now vulnerable. We closed on 08/08 at USD 833; upside moves above USD 840 will further support a bull argument. Technically bearish but not considered a technical sell with resistance levels (USD 890 – USD 981) now looking vulnerable.
Tankers TD3
August Futures – The futures traded through our resistance levels before entering a corrective phase, with the price closing today at USD 11.6471 (08/08). Downside moves that hold at or above USD 10.9320 will support a bull argument; below this level, the futures will have a neutral bias. The RSI is above 50 with the stochastic in oversold territory; momentum is warning the futures are vulnerable to further tests to the upside. Elliott wave analysis would suggest that we are in a countertrend corrective wave 4, suggesting there is a bullish wave 5 to follow. We are seeing a similar wave pattern on the September contract, with crucial support to follow on this technical at USD 10.7526.
Coking Coal
September Futures – Technically bearish in the August contract on the last report with upside moves considered countertrend, the positive divergence warned of the potential for a momentum slowdown. The futures traded to a low of USD 198.83, with the price remaining in divergence. We see a similar technical footprint in the Sep contract with the futures trading to a low of USD 203 with price in divergence, warning that the futures have the potential to see a momentum slowdown, meaning we are not considered a technical sell at these levels. The one difference in the Sep contract is that we see a 5-wave pattern lower, warning this downside move has the potential to exhaust soon. Technically bearish but not considered a technical sell, the futures are vulnerable to an upside move at this point.