Capes hitting 2016 levels – Baltic Dry Indices: Week 10 commentary.

by Dave Walker

HANDYSIZE

A small gap up at the start of Week 10 marked a steady climb for the Handysize Index, with the Friday fix at 421. Showing a little less energy than the previous week, the Handies are within reach of our resistance thoughts in the upper 400s.


Climbing to 27.52 the RSI was still at a relatively low, bottom-ish value. The MACD kept on its steady progress towards the signal line and possible bullishness.

The slight slacking in momentum may cause some difficulty in reaching our resistance ideas in the upper 400s to lower 500s, but no real indications are seen as yet.


SUPRAMAX

Another up-move to 790 for the Supramax Index in Week 10 was tempered by a relatively small range. Compared to the recent come-back 23 points doesn’t seem like much, but the index is now into our 775-875 upside resistance ideas.

Whether there is strength to push through this zone remains to be seen as the RSI slowly entered neutral territory at 41.72. The MACD, still negative, drew very close to but didn’t quite reach the signal line and possible bullish sentiment.

With the shrinkage of the weekly range, we’re watching for any further progress to the upper end of our resistance thoughts in that 775-875 area.


PANAMAX

For Week 10 the Panamax Index finished at 894 and gave us an interesting candlestick chart . With the Friday fix so close to the week’s open, we have an-almost Gravestone Doji or a weak Shooting Star.

Both these poetically-named symbols hint at a bearish turn. Let’s not forget that the Baltic indices are panel-set not traded, so is this actually a signal of doom? The RSI, just making it out of bottoming territory, reached 32.20 as it flattened out and the lagging MACD still reached up (perhaps vainly) to the signal line.

The index has reached well into our lower band of resistance around 900, and perhaps this zone is exerting influence on the upward momentum. Our ideas of the index reaching our next resistance band around 975-1000 may weaken if the Panamaxes don’t follow through on the Week 9 surge.


CAPESIZE

More gloom plagued the Capesize Index in Week 10 as the index stair-stepped down once more to fix at a basement level of 235. Halting just below our mid-200s support ideas, the index isn’t far from the floor to say the least.

Any turnaround ideas hinted at by the RSI divergence of the past few weeks was wiped out as the indicator fell to 33.93, with the lagging MACD following along.

For the Capes, similar lows were seen in early 2016 when a heavily depressed index stayed that way for over two months. Levels below 200 were reached, and in 2019 may repeat themselves. Any upward pressure may not appear for some time, with our initial resistance targets in the 1000 region. Our initial upside resistance thoughts are in the 500s area, but the volatility usually seen in the Capes could well wipe that out in a week or less.


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