Capesize
November Futures – Technically bearish last week on the break in the head and shoulders pattern below USD 14,750, the futures targeted the USD 11,125 and USD 8,575 support levels. The downside break has been followed by 4 days of consolidation, with price trading between USD 13,500 and USD 15,500. The futures are moving lower today (17/10 USD 13,725), but we remain above the USD 13,500 support. A close below this level will weaken the technical further, suggesting the near-term support at USD 11,125 could come under pressure. Upside moves that fail at or below USD 16,965 will leave the futures vulnerable to further tests to the downside; above this level, and the technical will have a neutral bias. Only above USD 18,750 is the technical bullish.
Panamax
November Futures – Technically bullish last week but in a holding pattern with crucial support at USD 15,250 and resistance at USD 19,300. The price initially moved lower to USD 15,875 before finding buying support on 15/10. The technical remains bullish, but with a neutral bias, with the index moving USD 67 higher today to USD 17,460 (17/10), a close above USD 17,815 will mean momentum based on price is starting to strengthen. Seasonality in the futures (and index) tends to move lower around 20/10, whilst our wave analysis would suggest this recent upside move looks to be a countertrend wave 4, suggesting we remain technically vulnerable to a move to the downside however until we see a move below and a close below 15,250 the technical remains in bull territory. A close above USD 19,300 will warn that the USD 19,800 – USD 20,275 resistance zone could be vulnerable.
Supramax
November Futures – We noted last week that the inverse head and shoulders pattern was not looking reliable, whilst seasonality and Elliott wave analysis suggested the upside move in the futures could turn to the downside soon. The futures have traded to a low of USD 16,475, meaning the USD 16,375 support remains intact, leaving the price in a consolidation phase. A close below USD 16,375 will have bearish implications in the future. Likewise, a close above USD 19,500 will signal a bullish breakout. Technically we remain unchanged from last week, with seasonality and wave analysis continuing to warn that we have the potential to see further weakness. Key support to follow is at USD 16,375.
Oil
December Futures – Last week, we noted that the OPEC cut and their bullish rhetoric had probably killed off the longer-term wave cycle, as this is based on the psychological footprint of the market. The futures have been in a corrective phase since then! Key support remains intact at USD 90.57; downside moves that hold at or above this level will support a bull argument. If broken, the technical will have a neutral bias. Aggregate open interest (AOI) has been building since 13/09. It continues to do so, suggesting the market is opening new positions to the long side, as the futures have created a higher high whilst AOI continues to rise. Technically we are bullish and supported by increasing AOI. However, we need to hold above the USD 90.57 level; otherwise, fresh market longs could start to get a little nervous.
Iron ore
November Futures – The futures have traded below the USD 92.00 fractal low, meaning key resistance levels have now dropped. Upside moves that fail at or below USD 95.31 will leave the futures vulnerable to further tests to the downside; above this level, the technical will have a neutral bias, whilst above USD 97.30, the daily technical is bullish. The new low has created a positive divergence on both the daily and intraday RSI, not a buy signal; it does warn that we have the potential to see a momentum slow down soon. From a technical perspective, although bearish, the futures are not considered a technical sell at his point.
US HRC
November Futures – Having previously stated that downside moves below USD 734 will target the USD 701 and USD 673 levels, we have witnessed further moves to the downside. Price has now traded to a low of USD 680 before buying support in the last three sessions; we are now trading at USD 717 as of 17/10. Technically bearish, the futures are now moving higher on the back of positive divergence; upside moves that fail at or below USD 795 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 the upside moves should be considered a countertrend.
Tankers TD3
November Futures – Technically bullish last week, the rejection of the USD 17.6401 resistance warned that support levels could be vulnerable, as the futures were potentially in a corrective wave 4. However, an upside move above this level signalled that the futures would target the USD 18.6050 high. The futures broke resistance and have now traded to a new high, indicating we are on an Elliott wave 5 of this phase. Downside moves that hold at or above USD 16.7908 will support a bull argument; below this level, the technical will have a neutral bias. Wave analysis would suggest we now have a potential upside target of USD 20.4918; however, the new high has created a negative divergence with the RSI, not a sell signal it is a warning that we have the potential to see a momentum slowdown and will need to be monitored.
Coking Coal
November Futures – Technically bearish last week with upside moves that failed at or below USD 342, vulnerable to further tests to the downside. Having consolidated for two weeks, the futures have held the 8-21 period EMA’s, supported by the RSI above 50, resulting in the futures moving higher. However, we remain in what looks to be an upside countertrend move at this point. If we trade above USD 315, we target the USD 342 resistance; above this level, the technical has a neutral bias. The longer-term trend looks to be still bearish, but momentum is currently to the buyside; downside moves below USD 271 will warn that the USD 247 and USD 218 support levels are vulnerable.