Baltic Dry Indices: Week 10 technical commentary.

HANDYSIZE

Week 10 was another positive upswing for the Handysize Index, gapping up from Week 9 and steadily rising to a 611 close. Now into our 600 – 625 upside resistance zone, it remains to be seen what strength this run-up contains. So far, the turn-around thoughts we expressed in Week 7’s comments have borne out.

The RSI rose just above neutral to 48.07, and the MACD continued being dragged upwards by the positive index action, both suggesting the up-move may have some steam. Let’s see if it’s enough to push the MACD over its signal line.

If the index takes a rest in our 600 – 625 zone, we could see some support developing somewhere in the 575 – 600 area. That region was mentioned in our Week 3 commentary, but in the midst of a down-swing it proved to be weak support back then.

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SUPRAMAX

For Week 10 the Supramax Index rose steadily in a linear fashion, gaining 6 to 7 points per day to close the week at 1032. Adding a little extra to Week 9’s climb, hopefully this is the “more sedate action” we referred to in Week 9’s comments.

The Supras have just barely passed through the 975 – 1000 resistance ideas mentioned in our Week 8 commentary, and we might see further index strength.

The RSI sat back down a little to 64.39, and the MACD has crossed its signal line to the bullish side, suggesting some further strength. If the index reaches the 1100 – 1200 area and consolidates somewhat, that could turn our 975 – 1000 zone into support.

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PANAMAX

As with the Handies and Supras, the Panamax Index showed a near-linear climb for Week 10, closing at 1615. Blowing
our over-cautiousness out of the water, (yes, here in our Week 9 comments) the index used Week 9’s indecision as a ladder rung upwards.

The move also drew the RSI upwards, but not putting it into peakish territory yet. The index action also gave us a just-visible cross-over to the bullish side in the MACD, poking through the chart’s signal line. Our upside resistance target for this move is in the 1675 – 1700 region.

With this freshly-displayed strength in the index, we may see the 1350 -1400 zone become more of a support area. In the recent past this region has been the anchor-point the index swings around, and may still act as a zone of attraction.

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CAPESIZE

In contrast to the other indices, the Capesize Index faded steadily from open till close in Week 10. Overall however, the index stayed within the range seen over the last two months – a bit of a yawner to be sure, depending on your point of view.

As before though, we’re watching the 2500 – 2700 area for upside resistance, and trying not to think about our downside support ideas in the 500s. An interesting point is the RSI, which has broken below 30 a little.

In combination with the heavily negative value of the MACD, a RSI reaching into the 20s or lower may increase pressure for a bullish move. Let’s keep our eye on that.

Baltic Dry Indices Commentary – Week 33

HANDYSIZE:

The handy index entered the doldrums in Week 33, with nary a wander either side of 465. Whether seasonal cargo has an effect on the handies remains to be seen, as things still look weak to neutral. (unlike its sister Supramax index, which took an interesting hop upwards) For now, the Handy index
seems to be content, strolling along kicking stones.

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Let’s hope a seasonal kick will help to keep the Handy index wandering in the 450 – 525 range.
With RSI around 40, and MACD showing weakness, the index is displaying some anaemic tendencies.
Seemingly there is no ambition yet to push upwards through the 500 mark.

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SUPRAMAX:

The bullish turn we were mumbling about last week seems to have carried through, with the Supra index reaching a point not seen since the beginning of May 2017 (Week 18) Expectations could signal further climbing, if we see a push upward through the 800-850 region. So far, there seems to be more positivity than the lack-lustre tendencies of the Handysize Index.

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The MACD being on the positive side, the RSI at 52.55 bears watching (get it?) as it approaches the caution zone.

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PANAMAX:
Last week we mentioned the base that the Panamax index built on back in June, around the 1100 region. Looking further back to the beginning of 2017, similar activity around the 1000 level was seen. Dare we hope for more of the same around the 1200 mark? The general bullishness of the past few weeks may show some signs of consolidation over the next short while.

We observers can hope, as the Relative Strength indicator is approaching the peaking zone, showing 64.67 while the MACD continues on the bullish side.

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CAPESIZE:

The headlong charge of the Capes continues, although in this business we can’t avoid comparisons with the doomed Light Brigade. Nevertheless,
here we are. A backward glance confirms a fairly consistent average of 1500 – 1750 all the way back to the beginning of the year. The major excursions
up and down are to be expected with the relative narrowness of Cape market cargo. Take a quick look at an iron ore / shipping demand and growth chart.
Smearing the screen with our index finger, we can deduce the Capes’ convoluted fortunes through the last year or two.

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A target area of 1500 – 1750 could continue as the index average. However, caution is required since the Relative Strength Index is entering “be careful” territory. The MACD lines still show positive.
As we can see from the recent past, the Cape Index resembles the water-buffalo – a large bulky animal indeed, but capable of displaying sudden maneouverability.
Don’t glance away; the index is rapidly catching up to the peaks seen in November 2016 and March/April 2017.

What’s next for our Cape Index heroes? Tune in next week, when you might hear us say, “What the………?”

$SALT – Scorpio Bulkers

2016-10-17 10:47 AM

Scorpio Bulkers – SALT

Back in July we spoke of possible bullishness in SALT. Since then we’ve seen tentative, but steady, climbing of the stair case, with some heavy testing of support points. There appears to be a building of price support in the 3.70 area, and this may lead to a more solid consolidation.

So far, so good.

Previous mumblings on SALT:

2016-07-09 10:55 AM

Scorpio Bulkers – SALT

As the week closes, SALT has maintained its steadiness, perhaps even knocking on the ceiling around 3.15 over the past few days. Any building into the 3.00 / 3.50 range could prove slightly bullish.

Guggenheim Shipping ETF (SEA)

Guggenheim Shipping ETF (SEA)

2016-09-24 5:34 PM
We thought things were looking iffy around Sept 14th with $SEA showing a little weakness, but so far, the consolidation across some shipping sectors has translated into a steadying influence on this ETF.
The small pop up and pullback over the last few days is still within the recent range. Our pessimism through July 2016 slowly turned to optimism and behold, we are knocking around the 11.25 – 11.50 region we were hoping for back then…..even a little better. See what happens if you stop watching?

Previous scribbling about SEA ETF:

2016-07-15 10:48 PM
Guggenheim Shipping ETF (SEA)
Some consolidation and potential support seen above our hoped-for range last week. (10.30 – 10.40)

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2016-07-09 2:54 PM
Guggenheim Shipping ETF (SEA)
Eyeballing 11.25 to 11.50 for any price recovery for SEA. Weakness may be present, although there may be support building in the 10.30 to 10.40 range.
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2016-07-06 8:11 PM
Guggenheim Shipping ETF (SEA)
After some anaemic recovery in the last few months, it appears some bearishness has set in again for SEA.
According to my fuzzy logic (apparently that’s a techie term), a failure to rise through some resistance around 12.35 has created some downward momentum. A potential consolidation around 11.70 to 11.80
also failed and the next downside price target is around 10.25. Any consolidation in the 10.25 – 11.25 range could support an upward push through 11.50, but confidence isn’t high.

Dry Bulk Update

Good Morning Superior Maritime.

Dry Bulk:

Looking at the numbers out of London this morning the Capes continue to climb. The BCI 5TC jumped over 9% with routes C8 14 up almost 19% and C 16 up just over 13%. The BDI has now risen above 900 gaining over 4% on the day. Some of the larger brokerage desks express strong sentiment in the Cape space citing a potential increase in miner output that should tighten available tonnage. Our friends at Arctic Securities suggest the recent uptick in Capes has put a floor on asset prices that will further confound owners struggling with the scrapping decision.

Average of the 4 T/C routes is around $13,300 per day.

Average of the 5 T/C routes is around $14,350

BPI T/C routes are averaging just under $5,400

BSI T/C routes are averaging just over $6,900

BHSI T/C routes are averaging around $6,000

Dry Bulk Futures:

Our good friends at FIS tell us the paper market (FFA’s) is firmer, led by the Capes while expecting the Panamax curve to trade up modestly, and the Supra/Handy to be flat to moderately up. CAL17 futures are now trading at $7,600 for the Capes after gaining 2.3% today.

All in all, a welcome spike for the big ladies in an otherwise flat/weak dry bulk market.

Where’s The Margin?

If context is everything, then recent news of a Neo-Panamax containership gashing her hull in the newly expanded Panama Canal certainly drew some unwanted attention.

The incident, as it should, gives pause for reflection. At the time I was on a train of thought about the “dry bulk funk”, as TMT’s David Chinski calls it. A whole matrix of cause-and-effect can accumulate into a crippling situation very rapidly, whether physically or financially. Murphy’s Law probably originated with a Captain or Chief Engineer. (or maybe a VP Operations?)

All those stresses raise the pressure on the fulcrum that is a vessel’s operations center, officers and crew. The margin of safety, financial and otherwise, shrinks. Faced with these challenges, is it too much to contemplate building value in something?

Story-time: I was once aboard a freshly-unloaded bulk carrier. While departing the berth, her stern took an unplanned excursion off to port. A bouncing sensation and loud thumping noises suggested some nasty consequences in the propeller area. Inspection and a humbling low-speed trip to the loading port ensued, where the propeller had its mangled tips cut off. The next cargo discharge was followed by a dry-docking. The resultant shenanigans at far-off offices can only be imagined by us lesser mortals. One transatlantic round-trip later, for whatever reason, the ship was sold off. Maybe the last few straws had been enough.

Back to the train of thought. Once upon a time, there were a couple of Canadian mining companies that operated on a “margin of safety” principle. In essence, the output of the physical plants was about 85% of their full capability. With such over-capacity built in, there were stresses taken off the entire operation, from executives to plant equipment to local management and the miners themselves. Of special note was the employee safety performance, which was award-winning for the time. And yes, these were publicly-traded companies.

Is this an out-dated idea in our brave new algorithm-driven world? Maybe; it’s likely too simplistic. Such a proposal today would no doubt be met with universal scorn. Outside a straight asset play, what finance guru would want to have 15% of an asset’s potential as a cushion? On the other hand, what should an investment prospector be looking to find? I hesitate to use the worn-out phrase “over-capacity”, especially these days. How would such a cushion be incorporated into a shipping company and made to work?

As seen in our minor ship-casualty examples above, it’s a safety zone. It’s that space between us and the car, ship or immovable object in the other lane. It’s the operating wiggle room in a company that isn’t solely financial (but can quickly become so).

The world we now live in is seeing the rapid compounding of computing power. The algorithm-driven systems mentioned above can’t just be utilized to find more convoluted trading methods. In shipping, that power has to go to work; not just in financing, but in operating, in maintaining and in optimizing all facets of that margin of safety.

Posted on tonmiletrader.com , AUG. 5, 2016

Triple_E or Triple-B? Big Box-ships Beware….

An interesting concept (but perhaps a little shelf-worthy these days) seen in a recent article: the 26,000 TEU container ship. Does this have any merit, given the financial hand-wringing, (and debates on handling potential casualties) with our present-day behemoths around two-thirds that capacity? As Mr. Barry Parker put it, “Don’t forget the JAHRE VIKING “. Now there was a tanker-and-a-half.

A quick search reveals that an anchor that belonged to the Jahre Viking, all 36 tons of it, is now ensconced at the Hong Kong Maritime Museum. As we cast our eye around at Capesize bulkers, and maybe a jaundiced eye at the Very Large Ore Carriers, any talk of even larger containerships has to come with a caveat: take care, lest thy parts soon becometh a museum exhibit.

On the more immediate considerations of mega-boxships, let’s not forget the CSCL Indian Ocean incident in Hamburg.

Posted on tonmiletrader.com, TUE, JULY 5, 2016