Plunge upon plunge...except for the Capes: Baltic Dry Bulk Indices - Week 2 2019

January 14, 2019

Well, a week or two certainly makes a difference, doesn't it? Our last commentary was for Week 50, 2018 and we posted dry bulk and tanker charts through the holiday period, watching as the black marks began to pile up. Our friend Jerome Sorrel summed it up well on the DryBulkPelagos blog - "the sound of the deflating shipping market."
Let's poke around and see what we can sort out from all this shipping nonsense...

 

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HANDYSIZE

 

For Week 2/2019 the Handysize Index gapped down in even heavier fashion than previous weeks, plunging to
a 524 fix on a near-40-point drop.
In our Week 50/2018 commentary we discussed that the Handies might be at a crossroads, with some pessimism that a drop to the 500-525 zone might be in the works.

The lagging, bearish MACD entered negative-value territory as the RSI approached bottoming values at 23.35.

With these values and the index hard up against our 500-525 support ideas, some hope of arresting the plunge may be there. However, it will be hard to visualize in the face of such a headlong dive in the index.

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SUPRAMAX


In Week 2/2019 the Supramax Index went off the edge hand-in-hand with the Handies. The index gapped down from Week 1's 946 to a 933 open for Week 2. A further 91-point drop on the week brought the Supras down to an 842 fix.

In our previous comments we noted some possible attraction in the 960-975 area, but that any weakness might result in a downward run to 800-850 territory. Week 2's action puts the index squarely in this lower zone with a well-bottomed RSI at 9.82.

Strengthened negative values were seen for the heavily-lagging, bearish MACD. While these indicators might suggest it may be time for a rest, the 800-850 zone will require monitoring for any further weakness in this heavy down-move.

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PANAMAX

 

Week 2 / 2019's Panamax Index took a page from the Supras and Handies, plunging over 160 points on a gap-down open to fix at 1137. We had previously opined that there might be some upside resistance around 1575-1600, however the index didn't make any forays above 1500 before taking a dive.

Going back to Week 43/2018, as the index declined the Panamaxes gained only fitful support for the remainder of 2018. This push down through our hoped-for support in the low 1400s has put the RSI at a bottom-region value of 19.74.

Gaining some bearish strength with the plunge, the MACD pushed harder into negative values. This may indicate some braking action on the Panamaxes' downhill run, but nothing is visible in actual index action as yet.

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CAPESIZE


Being the odd man out in dry bulk for Week 2 / 2019, the Capesize Index showed some very sedate action. Closing at a 1966 fix, it gave some credence to our Week 50 / 2018 ideas, i.e. that there wasn't the strength to stay above our low-2000s resistance zone.

The Week 2 candlestick shows a hint of index weakness, with the noticeable upper wick. The RSI maintained some above-neutral strength at 49.57, while the MACD rose slightly to park itself on top of the signal line, perhaps hinting at a little bullish tendency. 

Bumping along under that low-2000s resistance zone,
the Capes have enjoyed a little spell in limbo over the holiday period. Our low-side support thoughts are around the 1050-1000 zone, as we suspiciously eye this rare calm in the Capes.

 

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