$BDRY pushes further. Breakwave Dry Bulk ETF: Week 26 commentary.

by Dave Walker

BDRY profile: ”The Fund’s investment objective is to provide investors with exposure to the daily change in the price of dry bulk freight futures, before expenses and liabilities of the Fund, by tracking the performance of a portfolio consisting of a three-month strip of the nearest calendar quarter of futures contracts on specified indexes that measure rates for shipping dry bulk freight.” Source: drybulketf.com

$BDRY Forward Freight Agreement weighting: Capesize: 50%, Panamax: 40%, Supramax: 10%.


A small gap up and a close at 13.15 marked the slow climb in $BDRY for Week 26, with the fund showing some backing from some new-found dry bulk market optimism. Freight Investor Services put it succinctly – “hotter than a billy goat with a blowtorch.”

With the fund’s up-move, our RSI pushed higher to 75.41, the indicator giving further peakish indications even with such a slow steady move upwards. The MACD, just shy of zero values, continued its bullish trend.

The overall bullishness in nearby dry bulk futures has had a positive effect on BDRY as it continues its long, slow push into our $12 – $14 resistance ideas. Should the positivity continue in BDRY, our Week 22 $10.50 – $11.00 support thoughts may consolidate further, giving a decent foundation.


For some insight on financial freight futures, pay a visit to https://cotunchained.com/ for Commitment of Traders data on SupramaxPanamax and Capesize positions.


Baltic Supramax Index, Week 26.


Baltic Panamax Index, Week 26.


Baltic Capesize Index, Week 26.


*Disclaimer: superiormar.com holds no stock in $BDRY

$BDRY Breakwave Dry Bulk ETF : Week 25 commentary.

by Dave Walker

BDRY profile: ”The Fund’s investment objective is to provide investors with exposure to the daily change in the price of dry bulk freight futures, before expenses and liabilities of the Fund, by tracking the performance of a portfolio consisting of a three-month strip of the nearest calendar quarter of futures contracts on specified indexes that measure rates for shipping dry bulk freight.” Source: drybulketf.com

$BDRY Forward Freight Agreement weighting: Capesize: 50%, Panamax: 40%, Supramax: 10%.


Week 25 saw $BDRY continued its tentative push, moving a little more into our $12 – $14 resistance range to close the week at 12.69.

Our RSI retreated to a still-strong 66.00 with a MACD on the threshold of positive values as BDRY very gently trended upwards.

As before, we still have the impression of $BDRY building on a base of support just below existing values. We tentatively marked possible support around $10.50 – $11.00 back in Week 22. A few of our indicators appear to hint at underlying strength, although continued peakish signs and stubborn upside resistance is cause for caution.


For some insight on financial freight futures, pay a visit to https://cotunchained.com/ for Commitment of Traders data on Supramax, Panamax and Capesize positions.


Baltic Supramax Index, Week 25.


Baltic Panamax Index, Week 25.


Baltic Capesize Index, Week 25.


*Disclaimer: superiormar.com holds no stock in $BDRY

Capes pause, Panamaxes sit tight. Baltic Dry Indices – Week 18 commentary.

by Dave Walker

HANDYSIZE

Continuing its slow fade in Week 18, the Handysize Index wandered through a tight 4-point range to fix at 382. In a slowing downtrend the Handies displayed some uncertainty as the index weakened.

The RSI continued to diverge, gaining to 48.20 and possibly hinting at weaker bearishness. As before the MACD tracked horizontally, staying just above its signal line and resisting a bearish line-crossing. However, the general index weakness may overcome the indicators regardless.

Back in Week 15 we discussed the Handies’ retreat from our upper-400s resistance and a slowing downtrend above our lower-300s support target. We’re still watching the lower 300s for potential support should the weakness grow stronger, but keeping an eye on the diverging RSI just in case.


SUPRAMAX

Retreating slightly from the previous two weeks’ climbing, the Week 18 Supramax Index declined steadily to a 752 fix. Shading most of the previous week’s gains, our 775 – 875 resistance zone from Week 7 and Week 13 appears to have flexed its muscle once more.

The RSI climbed further to 61.11, flirting with peakish levels for the Supras. The MACD wavered a little, easing its upward slope as the index weakened.

It remains to be seen if our Week 17 low-700s support ideas will have any strength, and if the index attempts another push into the 775 – 875 region. As weakness returns and the RSI approaches peakish territory, we’re watching that area with interest.


PANAMAX

Staying in a tight 3-point range the Week 18 Panamax Index barely registered on the chart, fixing up a single point on the week at 1190. Our thoughts of support and/or attraction around 975 – 1000 may be coming to bear as the index momentum slows again.

The RSI approached peaky ground for the Panamaxes, settling at 73.97. Whether the tight range and high RSI indicate a loss of momentum in the index remains to be seen. The lagging MACD stayed blindly bullish in its course with no hint of weakness yet.

The slight fizzle in the Panamaxes has us watching our 975 – 1000 support ideas once more. A less steep climb could create a less peakish RSI, however the overall feel seems to lean towards index weakness. Another small consolidation step to maintain index strength would be a welcome sight.


CAPESIZE

A gap up at the open marked the continued surge in the Capesize Index for Week 18, fixing up overall at 1290 after falling from a 1420 high. The index solidly entered our
Week 14 resistance target of 1000 – 1200 but then pulled back just in time to lend our ideas some credibility.

The RSI rose into its neutral zone at 43.31, while the still-negative MACD reinforced its bullish signal-line crossing with the index move.

Our 1000 – 1200 resistance thoughts from Week 14 are visible as a sizable blip on the chart, so this loss of momentum came late in the week and may still hold some sway. Some consolidation for the index to build on would be a good thing, but should weakness set in harder the recent heavy lows are too close for comfort.


Drone Ships, Convoys and the Modular Vessel

A tale of the near future…..possibly.

by Dave Walker


The ten-person crew had joined the convoy by pilot-less flying drone. Some of them still preferred pilot ladders.

At least with the ladders, they had the fleeting sensation of holding their fate in their own hands. They gathered, standing on the starboard bridge wing of the Santa Maria’s accommodation module, looking aft. The two other autonomous container drones in the three-vessel convoy, Nina and Pinta, were strung out astern, identical to Santa Maria except for their missing accommodation and service modules.

A few days before, all three ships had released their automated moorings and self-maneuvered their way offshore to the port’s marshalling zone. As usual, the ship-congested area had necessitated unlocking the expensive enhanced navigation option. Soon after, they had picked up their human babysitters and begun the long voyage to the west. Although they were relatively small container ships, their combined capacity belittled the single behemoths of the past. Towards the end of their journey, depending on requirements, each ship might go its own way to a separate discharge port.

The communication system of every container, linked to every server of every cargo owner, chirped constant updates on progress and condition. The cargo would continue the communication process right up until arrival at consumers’ factories and homes, every code and chip tracked from manufacture to distribution to delivery. A similar process was going on within the ships’ navigation and propulsion systems, as sensors and monitoring servers both ashore and at sea processed every parameter, vibration and signal.

For the past few months, the fleet had been using liquefied natural gas for fuel, their interchangeable power and fuel modules mounted to reflect the current energy market. The energy service provider and the vessels’ ownership consortium had projected favourable gas-fuel economics for the immediate future, but there was always an ongoing give-and-take between dual-fuel engined hybrid and gas turbine-electric modes.

The ship’s engine-room, like heavy fuel oil, was a thing of the past, now replaced with discrete, interchangeable power generation modules, hybrid gas-fuel pods and electric azipod drive units. This time, the battery hybrid units were ashore, re-furbished and stored in strategically placed service centres awaiting their next deployment. It was hoped that battery technology wouldn’t get too far ahead of these units and make them obsolete, but that was the energy service provider’s problem, not the ship-owners’. Volatility in the raw materials price for battery banks had also played a part in their sidelining, and they also faced competition from several combined-cycle propulsion options.

On this voyage series, the decision had been made to mount the accommodation and service module on the oldest vessel, the Santa Maria. The three ships in this convoy were the oldest in the company, their 3D-printed alloy hulls among the first built. In the years since, the shipyards had perfected their craft, the huge 3D-forming gantries following their AI master servers, re-designing, building and improving hulls and hydro-dynamic profiles in a monstrous, fascinating ballet. Following the operating input from myriad hull and machinery sensors, the improvements were processed, programmed and ready for the next new-build.

The crew knew that this was the Santa Maria’s last trip; soon she would be back at her original birthplace. She would find herself next to a new hull being 3D-formed from her recycled metal, even as her own hull still lay half-demolished by laser and plasma cutters. The scrapping beaches where the world’s ships once ran themselves ashore were almost a memory now. As 3D shipbuilding technology progressed, the methodology for building tankers and bulk carriers was at a tipping point. The world’s scrap merchants were seeing the end of the welded steel fleets as they tried to adapt and re-invent themselves.

The Santa Maria’s crew had gathered for a resource management meeting in the spacious crew mess. As meetings went, they tended to be rather informal; more of a confirmation of situations between the various professional disciplines onboard. One of the navigation programmers was trying his hand at cooking, and the senior Captain and engineer had just finished discussing some variation in one of the azipod drives. The senior Captain had mused aloud as to how long her profession would be around as the engineer, close to retirement, ruefully nodded. One of the maritime technicians wondered if he dare broach the subject of video-game nostalgia.

The Santa Maria’s crew were not aboard to nurse-maid an old vessel to her final rest. As part of the company’s end-of-life resource management, they were reviewing, programming and preparing her for it. The service life of her hull and components had long since been worked out from constant monitoring by the management servers and sensors. Her power and fuel modules were being prepared and upgraded for their next assignment, possibly in the new Santa Maria’s hull. Non-critical ancillaries were being de-commissioned and disconnected, ready for re-processing. The company system was closely linked with class society and insurance servers. According to them, Santa Maria’s convoy mates Nina and Pinta were not far behind in meeting their recycling dates. The economics algorithms were signalling that updated hull fabrication technology had made recycling the older vessels worthwhile.

The gathered crew talked of one of the few human decisions – to combine the three ships for the Santa Maria’s last voyage. Of course this didn’t occur often in convoy groups due to operating considerations, and jokes were cracked about sentimentality and job preservation instincts at head office. The press releases on the historic nature of the three ships were roundly criticized by those present. Some media wag had nicknamed the vessels Faith, Hope and Charity, from some outdated perception of their age. It seemed the idea of the worn-out old tramp ship still popped up as a romantic notion among the less knowledgeable. Since machinery module updates were now so frequent, and new-builds a matter of disintegrating older hulls and basically re-manufacturing them, the notion seemed a little tired to those in the conversation.

The duty ship manager, ashore in the vessel operating centre, overheard the crew’s conversation. She chipped in from the large screen in the mess-room and bemoaned the poor image that shipping still had. Granted, the industry was still smarting from the infamous ‘Spanish Armada’ incident. Unknown hackers had disrupted navigation and communications to such an extent that four vessels of a six-ship convoy had gone astray, scattering themselves up and down the Scottish Hebrides and west coast of Ireland in a horribly expensive re-play of the Spanish fleet’s destruction in 1588. Years later the litigation and financial re-structuring was still going on, as was speculation in the maritime press. It appeared that certain entities might have balked at paying for inflated software-unlocking fees to navigate the nightmarish congestion of the English Channel, hence a re-routing of the pooled fleet around Ireland and the North of Scotland. The doom-bound cascade of underlying factors had spawned hundreds of conspiracy theories, which included everyone from hacker collectives to malignant foreign powers.

The fact that the two surviving vessels had human crews wasn’t lost on the class societies and near-bankrupt insurance consortium. Since then a lead ship with a human crew was required in each convoy, in addition to shore-based control and existing redundant back-ups. The lead vessels also had the capability of local convoy control. Sea-time rotation for shore-based remote ship operators was also required, although with rapid technological advances, the crew could see the need for such requirements shrinking. Even the “mother-ship” service concept of the convoys was now in question.

Similar discussions were happening over the Far East, where horrendous Malacca Strait congestion and corresponding navigation software enhancement fees had become a major bone of contention. A group of shipping financiers were reviving the Kra Canal project to bypass the whole mess, and some major negotiations had been going on behind the scenes. Someone even floated the idea of choosing manual navigation in the maritime traffic jams, but it seemed nobody had wanted to tie the bell around the cat’s neck and be the first to try.

As the crew meeting came to an end, some alarms gently bleeped. Some conflicting situation or metric had cropped up in the gas-fuel pods of Pinta, the tail-end vessel. With protocols already set, the assistant engineer and the two technicians would check the pilot boat for deployment. Nestled in its bay below the Santa Maria’s service module, the sturdy vessel was part lifeboat, part workboat and was internally launched and retrieved from each ship’s stern. The emergency lifeboat was also on standby, just in case. The ship’s pilot-less drones were likewise ready, but the general sentiment was against using the tiny flying taxis at sea. In any case, the procedures had gained the label of formalities, as physical human intervention between vessels had become a relatively rare thing.

As the programmers and ship manager turned to their touchscreens to work through the fuel situation, the captains assumed local control and stood by to turn all three ships into the wind. Ready to move the Nina off to a safe stand-by distance, they kept the Pinta in her farthest-astern position until the gas-fuel safety protocols had been run. Working through their check-lists, both those aboard and ashore confirmed the same conclusion a few minutes later, and after the dedicated convoy server came up with the answer. Redundant sensor loops had been run, and the alarm stemmed from a faulty fuel flow sensor.

A while later, after final checks on the potential emergency, the voyage was resumed. Santa Maria’s crew returned to their conversations. Having moved to the crew lounge at the aft end of the accommodation module, they sat chatting and staring out over the stacked containers at the ship’s wake. The manager remotely stared with them from a screen-wall.

Their conversations, at some point, always returned to the same subject – were they the last of their kind?

The ship manager, snug ashore, stayed silent.

Panamaxes produce progress. Baltic Dry Bulk Indices: 2019 Week 9 commentary.

For Week 9 the Handysize Index built up well on a little consolidation, having opened within Week 8’s range but climbing to a 393 fix. So far the action is in line with our previous thoughts, i.e. attraction to the lower 400s zone first kicked around back in Week 3 and a few times since.

Even with recent index climbing, the RSI stayed in low-end territory at 22.44 and the still negative MACD pulled up slowly, hinting this recovery may still have a way to go.

So far for this up-move, our upside resistance target remains in the low 500s to upper 400s zone.


SUPRAMAX

The Supramax Index gapped up once again in Week 9, although showing less exuberance than the previous two weeks. Closing at 759, the index slowed its uptrend as it approached our 775-875 upside resistance thoughts from Week 7’s comments.

The RSI continued to approach neutrality at 39.11 as the MACD encroached on its signal line, decreasing its negative value and hinting at more bullishness.

Our eyes are on the 775-875 area for signs of resistance to the Supras’ recovery. The tighter range for Week 9 might be the first hint of it.


PANAMAX

For Week 9 the Panamax Index left its baby-steps behind and surged, gapping up at a 683 open to a Friday fix of 863.

The RSI, even though climbing ended the week at a lower-end 28.93, and the still heavily-negative MACD made a more solid hook towards the signal line. This may signal some continued upward pressure is present.

Now getting closer to our lower resistance ideas around 900, this new strength may see a reach for our 975-1000 thoughts instead.


CAPESIZE

Week 9 posted more gloom on the Capesize Index. A gap-down drop took the index towards our lower target region in the 300s, fixing at 383 on the week and dashing our hopes for some support in the lower 500s.

Interestingly the RSI continued to diverge as the index dropped, climbing to a neutral 40.76 to continue hinting at possible strength….somewhere. The MACD continued into negativity along with the index.


The divergent RSI has us watching for some recovery, but for now the Capes seem to be happily(?) on their way to a possible mid-200s support target. The hope is that some pull from the 500s may yet exist.