Capesize
October Futures – The upside move in the futures traded above the USD 16,950 resistance resulted in the futures trading to a high of USD 21,000. Our Elliott wave analysis suggests that the upside move should be considered a countertrend, with the futures remaining vulnerable below USD 23,045 and neutral above. The new high on Friday in the futures has created a negative divergence with the RSI on the intraday technical, not a sell signal. It is a warning that we have the potential for a momentum slowdown. Downside moves at or above USD 16,875 will support a near-term bull argument; below this level, the technical will have a neutral bias, warning that the USD 14,750 fractal support could be tested. If we trade below USD 14,750, the daily technical will have made a lower low, suggesting we could be entering a bearish wave 5, indicating the USD 11,125 and USD 8,575 fractal supports could come under pressure. Technically price is bullish, but the wave cycle indicates this move is countertrend; the intraday divergence warns we are vulnerable to a technical pullback.
Panamax
October Futures – Having traded above USD 18,700, the futures have made a higher high, meaning the technical is bullish based on price; however, the intraday technical is bearish with a neutral bias; our Elliott wave analysis continues to suggest that the current upside move is countertrend. Upside moves that trade above USD 19,300 will create a negative divergence with the RSI, not a sell signal. It does warn that we have the potential for a momentum slowdown. Downside moves that hold at or above USD 16,525 will support a bull argument; below this level, the futures will target the USD 15,250 fractal support. Technically bullish but not considered a technical buy due to the potential intraday divergence above USD 19,300.
Supramax
October Futures – The futures have now confirmed that they are in a countertrend Elliott wave 4 based on our intraday oscillators; however, the daily technical remains bearish with a neutral bias below USD 19,975. Above USD 19,975, the daily technical will have a higher high; our wave analysis would suggest that the futures remain vulnerable below USD 27,153 and neutral above. Downside moves that hold at or above USD 15,959 will support a near-term bull argument; below this level, we target the USD 14,200 low. Technically bearish with the intraday futures moving lower on the back of negative divergence, warning support levels could be vulnerable.
Oil
November Futures – On the last report, we noted that the downside move below USD 91.51 implied that we had started a new bear cycle. The futures initially moved higher and consolidated for a week before breaking to the downside and trading to a low of USD 84.51. Upside moves that fail at or below USD 98.35 will leave the futures vulnerable to further tests to the downside; above this level, the Elliott wave cycle will have a neutral bias. Only above USD 105.48 will the wave cycle have failed. Technically bearish, we maintain our view that we have a potential downside target of USD 71.71.
Iron ore
October Futures – The futures remain technically bearish with prices below the 8-21 period EMA’s supported by the RSI below 50. Upside moves that fail at or below USD 100.86 will leave the futures vulnerable to further tests to the downside; the near-term technical will have a neutral bias above this level. Only above USD 104.30 is the technical bullish based on the higher high, giving us a potential early warning that the downside cycle has been completed. However, upside moves that fail at or below USD 110.95 will leave the longer-term cycle vulnerable to further tests to the downside; for confirmation that the bear cycle has been completed, the futures would need to trade above USD 120.20. We have seen a lower five-wave pattern, meaning we could see cycle completion, making USD 93.00 the key support to follow. Downside moves below this level indicate that the futures have entered a larger bear cycle (as recently witnessed in Brent on the move below USD 91.51). This would have bearish implications in the future and suggest that upside moves should be considered countertrends.
Steel
October Futures – Technically bearish with a neutral bias on the last report with key resistance at USD 875. The RSI was below 50 with the stochastic in the overbought territory; momentum warned that the futures were vulnerable to a move lower. Downside moves below USD 787 suggested that the USD 769 fractal low could be tested with further support between USD 759 and USD 734. The futures traded to a low of USD 750 before finding buying support today (26/09/22). The downside move has pushed the intraday oscillators to new lows, suggesting upside moves could be countertrends; the futures remain vulnerable below USD 819 and neutral above. Only above USD 855 is the technical bullish. Downside moves below USD 734 will target the USD 701 and USD 673 levels.
Tanker TD3
October Futures – We noted last week that based on the weekly cycle, the futures were still only on wave 5 of an extended wave 3 with a potential upside target at USD 17.6954; we had further resistance at USD 18.6940 and USD 19.9660. The futures traded to a high of USD 19.4030. Our oscillators are moving to new highs, having not crossed below 0, telling us that downside moves should be considered countertrends. Corrective moves lower that hold at or above USD 15,8515 will support a bull argument; the technical will have a neutral bias below this level. Upside moves above the USD 19.4030 will have further resistance at USD 19.9660, USD 21.5709, and USD 22.2366. Technically bullish with downside moves considered as countertrend, there is still the possibility that this current wave 3 is extending.
Coking Coal
October Futures – We noted on the last report that the futures were potentially in a more complex corrective phase as the previous upside move had failed to trade above USD 342, with the USD 251 support looking like it could come under pressure. The futures traded to a low of USD 247 before moving higher (currently USD 271). We maintain our view that upside moves that fail at or below the USD 342 level will leave the futures vulnerable to further tests to the downside; above this level the technical will have a neutral bias; whilst a move below USD 247 would suggest the USD 218 fractal low could be tested. Technically bearish, support levels are starting to look vulnerable, as the RSI is neutral at 50, with the stochastic in overbought territory.