Thursday, March 20, 2014

BDI Baltic Dry Index Weekly Chart Sideways Channels

The sideways symmetrical triangles played out to the decision time last summer. Most traders and analysts professed the end to the shipping sector. Instead, the BDI ran higher and easily achieved the 1500 and 2100 targets to satisfy the triangle patterns. At the end of last year, the negative divergence was highlighted (red lines), with the majority of trades saying to buy, buy, buy.  A spank down was expected instead and occurred. Price is favoring a sideways move through 1100-1600 going forward.

Copper is smacked lately due to China slowing down. Ditto for steel, coal, iron ore, most commodities that fueled the China boom over the last couple decades. If less coal, coke, iron ore and steel require shipping across the ocean, then BDI drifts lower. The ag sector remains strong so the dry bulk shipping of grains is likely doing well and accounts for the positive side of the Baltic Dry Index. With a continuing slowdown in commodities expected, the BDI will likely move sideways in this slow-growth global economic funk; a sick sluggish slow economy with far too many people out of work for years.

Note how the moving averages are lining out sideways; the 20-day MA is dropping, the 50-day MA is moving higher. The 200 is starting to flatten. Shippers typically receive a goose from summer into fall since they are shipping all the Christmas gifts and supplies. The projection is for a flat move in the coming weeks and months for BDI and the shipping stocks. Opportunities on the long side should shape up in the early and mid summer time. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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