Capesize
September Futures – As highlighted last week, the futures remained technically bearish with the divergence failing, warning we had the potential to test the USD 11,625-USD 11,415 support zone if the intraday divergence failed. The price traded to a low of USD 10,950 before moving USD 1,000 higher. The futures remain technically bearish and in trend, having made new lows. However, we are still seeing intraday divergence on the 1-hour technical warning of the potential for a momentum slowdown, suggesting caution on a downside breakout below USD 10,950. Upside moves that fail at or below USD 17,418 will leave the futures vulnerable to further tests to the downside; above this level, the technical will have a neutral bias.
Panamax
September Futures – The downside move below USD 16,500 indicated we saw an Elliott wave extension to the downside, resulting in the futures trading to a low of USD 14,275. Price remains below all key moving averages supported by the RSI below 50; the downside move means the daily divergence has failed. Upside moves that fail at or below USD 17,195 will leave the futures vulnerable to further tests to the downside. Above this level, the technical will have a neutral bias, whilst above USD 18,700, the technical is bullish. Intraday Elliott wave analysis suggests that upside moves should be considered a countertrend at this point.
Supramax
September Futures – Technically bearish last week, we highlighted a resistance zone on the morning intraday technical between USD 19,600 – USD 20,000. This has now held twice, resulting in the futures starting to move lower. The futures are below all key moving averages supported by the RSI below 50 whilst the stochastic is in the overbought territory; momentum is warning the daily technical has the potential for further tests to the downside. Upside moves that fail at or below USD 22,247 will warn the futures to remain vulnerable to further tests to the downside. Above this level, the technical will have a neutral bias. Intraday Elliott wave analysis continues to suggest we have the potential to trade below the USD 17,500 fractal low, with a possible downside target (using William’s approach) as low as USD 15,762.
Oil
October Futures – Price traded below the USD 92.38 support last week but failed to test our downside targets, with the futures only achieving a low of USD 91.51. The futures have since increased with price trading between the 8 – 21 period EMA’s whilst the RSI remains below 50. The technical remains bearish; however, the upside move above USD 97.77 means we now have a neutral bias; above USD 100.38, the technical becomes bullish. Price remains bearish, but we are seeing a series of divergences on lower timeframe charts warning that the current downside move could be exhausting, suggesting caution on downside moves at this point. If we trade to a new low, it again points to wave extension. However, based on the information, the market is not a technical sell. We acknowledge that any change in the Iranian situation could make this market a fundamental sell.
Iron Ore
September Futures – Technically bearish last week with the futures below all key moving averages supported by the RSI below 50, we noted that price has rolled to the downside with price testing the USD 104.25 support. Price continued to move lower with the futures trading to a low of USD 100.35. We have entered a consolidation phase for the last four sessions, with prices remaining below the shorter period averages. We remain technically bearish with a near-term downside target at USD 95.50; however, below USD 100.35, the intraday technical will go into divergence, and this will need to be monitored as we advance. Upside moves that fail at or below USD 108.91 will leave the near-term technical vulnerable to further tests to the downside. If we trade above USD 113.30 before making a new low, it suggests we remain in a complex corrective wave 4 with key longer-term resistance at USD 129.29. Just an observation outside of the technical, we have seen rate cuts in China today, but as of 14.25 GMT on 22/08, we do not see a move to the upside, warning that the market remains weak.
Steel
September Futures – Technically bearish last week, we maintained the view that the futures were not considered a technical sell below USD 812 due to a positive divergence in the market. Support was broken with price trading to a low of USD 790 before moving back up to USD 8,10. Price remains below all key moving averages supported by the RSI below 50; however, we continue to see a positive divergence with the RSI. Not a buy signal it does warn we have the potential to see a momentum slowdown. Upside moves that fail at or below USD 846 will leave the futures vulnerable to another test to the downside; above this level, the futures will have a neutral bias. Only above USD 875 will the technical be bullish. The intraday Elliott wave cycle is not the clearest; we may have another test to the downside in the near term; however, the daily divergence is significant, suggesting caution on lower moves.
Tankers TD3
September Futures – The futures traded straight through the USD 13.312 high and our potential upside target of USD 15.197; this forced the RSI to new highs, meaning the negative divergence has failed. We do not have intraday data to create precise Elliott wave counts, but this new high would suggest the futures are actually on an extended wave-3 and not a wave-5, as previously thought. Technically bullish with price above all key moving averages supported by the RSI above 50. Downside moves that hold at or above will support a bull argument; below this level, the technical will have a neutral bias. Based on the momentum indicators making new highs, downside moves should be considered countertrends. Resistance levels are now At USD 16.2210, USD 17.3646, and USD 18.8962.
Coking Coal
September Futures – Technically bearish with a neutral bias last week based on the depth of the pullback, momentum had warned we could be vulnerable to a test to the downside providing the RSI remained below 50. The RSI moved above 50 whilst the price moved above the USD 225 level, meaning the technical is now bullish. Downside moves that hold at or above USD 239 will support a near-term bull argument. Above this level, the technical will have a neutral bias, warning the USD 203 low could be vulnerable. Likewise, upside moves that fail at or below USD 356 will warn that the upside move is part of a more significant complex corrective move. Technically bullish, having made a higher high supported by the RSI above 50, the MA on the RSI is pointing in an upward trajectory suggesting support levels should hold if tested in the near term.