MOS Daily cautiously bearish. Recommended ratio: 10% MOS, 90% Cash. *Bad Vlad and Russian fertilizer producers are the top benefiters of fertilizer prices testing ATHs set during the previous recession in 2008 (yes I just implied that we are currently in a recession, it will become clearer soon with increased layoffs and earnings downturns). Grain, oil and fertilizer trade routes from Russia (and through Ukraine) continue to be disrupted by a mixture of sanctions and war as the global economic order continues to reorganize; Russia continues to find "friendly" trade partners that are willing to pay these higher prices. The rest of the world is now reeling from the effect this is having on gas/diesel prices because the transport industry (which is already seeing a labor shortage) is having to pass these prices on to the producers who pass this on to this distributors who pass this on to consumers -- who are currently experiencing reduced purchasing power and insufficient wage growth. This and China's "Zero Covid Policy" have exacerbated the rise in global growth destruction starting in 2019 (Covid-19 pandemic). Additionally, economies are starting to see contraction and, aside from Japan and Russia, central banks have been increasingly hawkish and committed to reducing global inflation by helping to weaken demand through monetary policy. All that said, we're now starting to see the already strange combo of low unemployment and labor shortages turn into lay-offs. Though unclear as to whether or not this will positively influence the driver workforce, it's hard to see reduced demand lead to more truck drivers unless the freight companies want to pay them more. Should be interestingly sad to see stockpiles of grain, oil and fertilizer combined with disproportionately high prices.* Price is currently testing the descending trendline from 04/18/22 as support at ~$49.50 and is on the verge of testing the 200 MA at ~$48.20 as support for the first time since December 2021. Volume remains Moderate (High) and is currently on track to favor sellers for two consecutive sessions if it closes today in the red. Parabolic SAR flips bullish at $59.13, this margin is mildly bullish. RSI is currently trending down at 34 after being rejected by 40.33 resistance, the next support is at 25.31. Stochastic is currently regressing to a bearish crossover at 16, the next support is max bottom and resistance at 39.11. MACD remains bearish and is currently trending down at -3 with no signs of trough formation; if it loses -2.52 support it will likely test -4.88 minor support. ADX is currently trending up slightly at 26 as Price continues to fall, this is bearish. If Price is able to bounce here then it will likely aim to retest 55.79 minor resistance. However, if Price continues to break down here, it will likely formally test the 200 MA at ~$48.20 before potentially retesting the uptrend line from March 2020 (~$45) for the first time since January 2022. Mental Stop Loss: (two consecutive closes above) $51.52.
Comment:
Price successfully retested the uptrend line from March 2020 (~$45) on 06/23 for the first time since January 2022