Capesize
November Futures – The technical was bullish neutral last week, having held fractal support at USD 14,750. The futures had been moving higher, supported by an oversold stochastic alongside a neutral RSI; we highlighted key resistance at USD 18,917. Upside moves that failed at or below this level would leave the futures vulnerable to a test to the downside; above this level, and we targeted the USD 21,000 fractal high. The futures traded to a high of USD 18,750, resulting in a technical pullback. Last week’s upside failure created a bearish head and shoulders pattern; today’s downside move has broken the USD 14,750 double-bottom fractal support (neckline), and the technical is now bearish. We now target the USD 11,125 and USD 8,575 support levels. Upside moves above USD 18,750 will mean the technical is bullish.
Panamax
November Futures – The upside move above USD 18,044 resulted in the futures trading to a high of USD 18,950, meaning we have failed to trade above the USD 19,300 high. Seasonality charts warned that resistance levels could be tested in the near term, they haven’t, but it has resulted in the futures consolidating for the last four days. The technical is bullish, with the price in a holding pattern; downside moves below USD 15,250 will mean the technical is bearish, warning that the USD 9,225 fractal low could be tested. Upside moves above USD 19,300 would warn resistance levels could come under pressure; however, both wave and seasonality charts would suggest that any upside breakout has the potential to fail, as the current bull wave is against the longer-term trend.
Supramax
November Futures – Seasonality warned that resistance levels could be tested in the near term resulting in the futures trading to a high of USD 19,150, meaning the USD 19,500 high remains intact. We noted on the weekly technical that there is an inverse head and shoulders pattern in play, a bullish pattern; however, two attempted breakouts have already failed, suggesting buyside momentum is not that strong, whilst seasonality tends to turn lower around the 20/10. The neckline resistance was broken on Friday, but the fractal resistance remains in place, with the futures moving lower today. Technically we are bullish. However, the inverse H&S pattern is not looking reliable, whilst seasonality and Elliott wave analysis suggests this upside move will turn to the downside soon.
Oil
December Futures – We noted last week that OPEC rhetoric could kill off the bearish Elliott wave cycle. OPEC cut production numbers by 2 Mil bpd resulting in the futures trading above the USD 95.80 and USD 98.06 resistance levels, supported by a build in aggregate open interest. The longer-term wave cycle is bearish neutral, which is a psychological footprint of the market; the aggressive bpd cut would suggest the wave cycle is no longer in play. The futures are bullish based on higher highs and higher lows, supported by the open interest build, suggesting fresh longs have entered the market. Downside moves that hold at or above USD 90.57 will support a bull argument; the technical will have a neutral bias below this level. Only below USD 86.35 is it bearish.
Iron ore
November Futures – No report last week due to the Chinese holidays. The futures did create a new low on the roll into November, creating a positive divergence with the RSI. Price moved higher but with minimal trading volume making intraday TA less reliable. The upside move means we are testing the EMA resistance band with the futures unchanged on the day at 96.30. Having traded higher in the Asian day session, the technical remains bearish, below USD 100.18, and neutral above. We have broken intraday trend resistance warning buyside momentum is increasing; upside moves above USD 104.30 will mean the technical is bullish. The downside move below USD 93.00 does warn of further weakness. However, we have a positive divergence in play, meaning this technical is conflicting. This is not helped by the onshore market being closed last week.
US HRC
November Futures – We noted on the last report that the downside move had pushed the RSI to a new low, suggesting that upside moves should be considered countertrends. Meanwhile, upside moves that failed at or below USD 819 would leave the futures vulnerable to further tests to the downside; above this level, the technical would have a neutral bias, whilst a move below USD 734 would target the USD 701 and 673 levels. The futures traded to a high of USD 781 before trading to a low of USD 713. The trend remains bearish; upside moves that fail at or below USD 757 will leave the futures vulnerable to further tests to the downside; above this level, the technical will have a neutral bias. Elliott wave analysis suggests that upside moves should still be considered countertrends.
Tankers TD3
November Futures – The near-term technical was bullish last week but with a neutral bias due to the depth of the pullback; the longer-term Elliott wave cycle remains bullish above USD 13.3903. The upside move is rejecting the USD 17.6401 resistance, warning the technical is vulnerable to a test to the downside, suggesting we are potentially in a more complex corrective wave 4. Upside moves above USD 17.6401 will target the USD 18.6050 high; likewise, downside moves below USD 15.6090 will warn that the USD 15.2283 and USD 14.3090 support levels are vulnerable. Technically bullish, the current rejection of the USD 17.6401 resistance would suggest that support levels could be tested soon.
Coking Coal
November Futures – Technically bearish last week, with momentum suggesting the futures were looking vulnerable to further tests to the downside. Price has consolidated over the previous two weeks with little directional movement. We maintain our view that upside moves that fail at or below USD 342 will leave the futures vulnerable to further tests to the downside; above this level, the technical will have a neutral bias. Likewise, downside moves below USD 247 will leave the USD 218 fractal low vulnerable. Technically bearish the RSI is above 50 (54) at this point, meaning the overbought stochastic is less relevant; however, if the RSI moves below 50, then momentum would imply the futures are vulnerable to a test to the downside.