Sub-capesize plunge continues - Baltic Dry Indices: Week 3 2019 technical commentary.

January 20, 2019

 

HANDYSIZE


In Week 3 the Handysize index again plunged on a gap-down 511 open, fixing at a dismal 451 for the week. Our previous fears for our 500-525 support ideas showed their teeth.

The index dive placed the RSI well into bottoming values at 14.50 and a MACD into negative values, which suggest things have gone far enough.

Of course, we shouldn't forget old J.M. Keynes who might have said, "The market can stay irrational longer than you can stay solvent." The range of the plunge has us watching the low 400s for possible consolidation.

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SUPRAMAX


Week 3 continued in horrendous fashion for the Supramax index, with another gap-down open and a fix way down at 701. Starting the week well into our 800-850 area of possible influence, the carnage continued without a rest.

The RSI dropped to even smaller single digits at 6.94, far into the basement. The MACD followed on, its bearishness now well into negative value territory. Both indicators suggest some index strength is long overdue, but here we are.

Our possible support ideas should the 800-850 zone be demolished are right around the low 700s, right where the index is now. This next week may tell if consolidation, if any, is in the cards.

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PANAMAX


In Week 3 our thoughts of a braking effect on the Panamax Index's downhill run failed to materialize.

 

With an gap-down open at 1118, the week ended gloomily at 1018. The RSI ran well into bottoming territory at 14.87, and the MACD followed blindly into heavily negative values.

Any braking action suggested by these indicators (see Week 2) hasn't shown its face as yet. Our next target for any consolidation in the face of such negative index action is the low 900-925 area.

 

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CAPESIZE


Relative calmness in the Capesize index continued for Week 3, as a foray to a 1748 low for the week turned into a 2037 Friday fix.

As the index cruised along in our low-2000s upside
resistance
region, the RSI maintained itself some way above neutral at 49.44. A mildly bullish MACD poked its nose just above its signal line, lending some support to the index even as it tested the downside.

The recent action has us still watching the 1000-1050 zone for down-swings, with some possible easing in the mid-1500s. Should some strength develop we'll watch for a significant break above 2000-2300. Naturally all this calm sailing causes us deep Capesize uneasiness, and seeing such tight number ranges in this index doesn't help.

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