Well the DCE iron ore futures woke up today and decided that if the rest of the world had already concluded the election result and caught a bid, it would follow. The foundation was laid yesterday with the offshore December futures leading the way and making a higher high in the market on the intraday 4-hour chart (see our morning technical for this one). Yesterday’s candle had made a higher high and higher low and closed on its mid-point so not an exciting close at ta glance. What the market had not factored in was not only had the market closed above the daily pivot point it had closed on the next days pivot point. The pre-open at CNY 791 showed the markets intent, with price pushing up from the start. We had the intraday bullish but thought we might stay in this range until the U.S count had completed. Instead the offshore 4-hour technical has finished the session above the 200 period MA. If this holds on Monday, we could be setting up for a larger bull run.
The capes were another market that was fast out of the blocks. Signs were there on the front month futures two days ago, but it had not done enough for the report to be considered as bullish. However, that changed this morning with the 4 – hour candle close at 8.00 a.m. putting price above short-term averages and the daily pivot. Crucially this is when momentum also moved into a bullish slope, meaning price and momentum were aligned to the buyside. The Dec futures closed at USD 15,000 up 5.1% with the Q1 up a whopping 6.6% at 8,500 (I say whopping as the Cape v Pmx closed at 300, up 375 dollar since we highlighted it as being undervalued) the Cal 21 also finished the week in positive territory at USD 13,175 +1%. The one negative was the bullish price action has been on light volume, this could just be the Friday effect, but if we see higher prices on Monday then be careful/concerned/cautious/conservative if volumes are light, as this is not normally a bullish signal
The Panamax failed to hold onto last night’s late gains, however the paper looked supported through the day on good volume. December futures closed at USD 9,425, which would be unchanged if you discount the late buying after the close yesterday. Meanwhile the Q1 21 was up 2.2% to USD 8.200 and the Cal up 1.6% to USD 9,700. All eyes on the Monday morning open, if you are bullish you will want to see the intraday 4 – hour 8.00 a.m. candle close above the USD 9,483 level. If you are bearish that is the level to defend. Let the battle begin.
A bit of an uneventful close in the Supramax today. The futures were up but at more subdued levels with the Dec at USD 9,325 +0.5%, Q1 USD 7,800 1.6% and the Cal up 0.6% at USD 8,975. The intraday technical has been bullish the last few days, but the pace is slow, and the daily trend is down suggesting we could see some selling action kick in soon on the prompt contract if the Rate off Change does not pick up.
Oil did not get the bull memo todey; we highlighted the need for it to correct last night but had concerns over the weak dollar. It turns out our concerns were unfounded with the futures off 2.7%, record Covid cases two days ago at over 600,000 have given the market the jitters, election uncertainty is not helping. The big question for oil is, where would it be if the greenback had support? Potentially a lot lower by the looks of it!
It is a Wrap
Have a good weekend