Capesize
October Futures – As noted last week, the futures had started to move lower with downside moves that held above the USD 11,132, supporting a near-term bull argument. The futures traded down to but held the USD 11,132 level, supporting a near-term bull argument, resulting in the futures moving higher (current price USD 15,250 on 12/09). Our Elliott wave analysis would suggest that this upside move is potentially countertrend; we highlight USD 16,950 as a key area of interest due to a Fibonacci overlap; however, the technical itself remains vulnerable below USD 23,045 and neutral above. The longer-term technical remains bearish; momentum is currently to the buy-side with USD 16,950, an area of interest for market sellers. Wave analysis suggests this move is potentially countertrend.
Panamax
October futures – The upside move is deep into the last bear wave meaning the near-term technical has a neutral bias. Upside moves above USD 18,700 will mean the daily technical is bullish based on a higher high. Price is now trading above the USD 17,200 – USD 17,304 resistance zone (the current price was USD 17,500 on 12/09); if we close above and hold above this level, then we target the USD 19,575 – USD 19,800 resistance area. The 8-21 period EMA’s have now crossed to the buy-side with the RSI above 50, indicating momentum is to the buy-side; however, our longer-term Elliott wave cycle continues to suggest that this current upside move looks to be a countertrend wave 4. The longer-term cycle remains vulnerable below USD 23,184 and neutral above. Technically the futures are in an upside countertrend wave 4 with price now trading just above a resistance zone. The intraday RSI is at resistance with the stochastic showing a negative divergence which will need to be monitored. Downside moves on the intraday 4-hour candle that closes below USD 16,000 will warn that support levels could come under pressure due to momentum based on price turning negative.
Supramax
October futures – The futures continue to move higher, having seen a double inside day candle pattern on the 8-9 of Sep. Price remains below the recent high of USD 17,800 and the key near-term resistance at USD 18,011. We look to be in the early stages of a countertrend wave-4 based on the intraday technical. However, this is yet to be confirmed on the daily technical. Upside moves that fail at or below USD 18,011 will leave the futures vulnerable to further tests to the downside; above this level, the near-term technical has a neutral bias, whilst above USD 19,975, the daily technical is bullish based on a higher high. The longer-term Elliott wave cycle would suggest the futures remain vulnerable below USD 27,185 and neutral above. Technically this move looks to be a countertrend. However, we need to see higher pricing to confirm it is the Elliott wave 4 that we believe it is.
Oil
November Futures – the OPEC production cut didn’t have the effect I was expecting last week, with the futures only trading to a high of USD 96.99 before selling down to new lows. We looked to have witnessed cycle completion, having already seen a 5-wave pattern lower to USD 91.51, followed by a move up to USD 105.48. from an Elliott wave perspective, the downside move below USD 91.51 would suggest we have started a new bear cycle (I.E., a wave 3 of a larger cycle). Since trading to a low of USD 87.24, we have seen the futures trade up to USD 94.89 (12/09) on the back of a weaker U.S. dollar. Upside moves that fail at or below USD 99.28 will leave the futures vulnerable to further tests to the downside; above this level, the wave cycle has a neutral bias, and only above USD 105.48 will the wave cycle have failed. If we suspect we have now moved into a larger cycle, then we have a potential downside target of USD 91.71. Technically bearish based on the lower low/wave cycle with upside moves considered countertrend at this point.
Steel
October Futures – Technically bearish on the last report with key resistance at USD 838 and USD 875. The futures traded above the USD 838 resistance to a high of USD 855, meaning the technical, although still bearish, has a neutral bias; above USD 875, it is considered bullish based on a higher high. Downside moves below USD 787 will warn that the USD 769 fractal low could come under pressure; further support is at USD 759 and USD 734. The daily RSI is below 50 (47) with the stochastic in the overbought territory; momentum is warning that the futures are vulnerable to a test to the downside; however, if the RSI moves above 50, then the stochastic becomes less relevant. Technically bearish with a neutral bias, key resistance is at USD 875. The higher we move from here, the lower the probability of the futures seeing another bear wave to new lows.
Tanker TD3
October futures – Technically bullish last week, the futures looked to have entered a countertrend wave 4 with key support at USD 13.2580. The futures traded to a low of USD 14.0220 before trading to new highs, indicating we are now on wave 5 for this cycle phase. The new high has created a negative divergence with the RSI; however, based on our wave analysis (using William’s approach), we have a potential upside target at USD 17.6954; above this level, we have further resistance at USD 18.6940 and USD 19,9660. Downside moves at or above USD 14.8717 will support a bull argument; below this level, the futures will have a neutral bias; only below 14.0220 is the daily technical bearish. Technically bullish, if we look at the weekly Elliott wave cycle, we look to be on a bullish wave 3, suggesting this current wave 5 is only part of a larger bull cycle.
Coking Coal
October futures – as noted last week, the upside move in the futures failed to trade above USD 342, meaning we are potentially in a more complex corrective wave 4. The futures continue to move lower with the price currently at USD 256, and if we hold above USD 251, it will support a near-term bull argument; however, if we trade below this level, then the USD 218 low becomes vulnerable. Upside moves above USD 315 will target the USD 342 resistance. Technically bearish, the USD 251 support is now coming under pressure; if broken, we have the potential to trade to new lows.