Look Out Below: The Baltic Dry Index Is In Freefall

Seeking Alpha ^ | 7-9-2010 | Brett Owens

[blam]

Look Out Below: The Baltic Dry Index Is In Freefall

by: Brett Owens
July 09, 2010

Remember a few weeks ago, when the Baltic Dry Index was on the ropes?

Well, it's off the ropes - and in complete freefall. Support has NOT held for the BDI, a favorite leading indicator of many investors. And one, might I add, that has performed quite well since the equity markets topped in 2007 (in '09, the BDI turned up 3 months before stocks).

The short term prediction appears to be PAIN, as shipping rates plummet. Apparently not as much to ship as the global economy heads for a wicked "double dip"...

The Baltic Dry Index is in free fall...this is probably not a good sign for the global economy.

Yet another reason to get OUT of stocks. Or, if you're feeling a bit frisky, you may want to consider shorting the S&P 500 (especially at the top of this mini-rally).

[TwelveOfTwenty]

The banking industry seems to have resumed its fall, too.

[mad_as_he$$]

YIKES!!!!

[MeneMeneTekelUpharsin]

So far, almost every time this kind of news comes out, the markets go up. Wall Street plays the “opposite” game all of the time. In so doing, they take all of the “little peoples’” money.

[patton]

Not good.

[Cringing Negativism Network]

Is that what’s known as a “head and shoulders” pattern?

[ikka]

Some perspective: yes it is low, however the low point was an index around 700 in October 2008. Currently is about 1900.

Best URL I have seen: http://www.bloomberg.com/apps/quote?ticker=BDIY&exch=IND&x=15&y=11

[oblomov]

What is the accuracy of technical analysis in forecasting future levels of the Baltic Dry Index?

[P.O.E.]

“7/7/10 (DJ) Depressed iron ore demand from Chinese steel mills has been pressuring shipping rates over the last month, with iron ore a key ingredient in steel production and the main product in dry bulk shipping. Chinese spot iron ore prices are near $US125 per tonne, a steep discount to the all-in cost of having it shipped from Australia, which is at $US155 per tonne.”

http://investmenttools.com/futures/bdi_baltic_dry_index.htm

[FastCoyote]

that’s also a log scale graph!!

[blam]

Steel Mills Sneeze, Global Shippers Catch a Cold (Baltic Dry Index Down 41%)

[blam]

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[DTogo]

Yes, seems like its dipping again, not necessarily crashing (yet).

[Oatka]

Is that what’s known as a “head and shoulders” pattern?

I was thinking that before the right shoulder fully formed. Now I'm thinking "Triple Top".

Either one is bad news.

[P.O.E.]

Looks like what’s been predicted elsewhere - a long-term secular bear.

[Digger]

So far, almost every time this kind of news comes out, the markets go up. Wall Street plays the “opposite” game all of the time. In so doing, they take all of the “little peoples’” money.

That's how I see it.

[M. Espinola]