BDI Baltic Dry Index Daily Chart Collapse

While no one was looking, the Baltic Dry Index, a gauge on the global shipping action, collapsed from over 1900 in November-December to 1100 now, a drop of 42%. In October 2011, the BDI was 2200 so the drop is 50%! After the holiday shipping occurs each year, a drop off in the Baltic is always expected, just as last year occurred as well. But, as China and emerging markets growth rates drop off, this chart clearly shows that global growth rates will be falling.

The indicators are agreeable to supply a postive divergence bounce but price has to drop under the early 2011 lows first. The BDI tends to lead the broad markets and global economy. The overall downward nature of the chart for the last two years ushers in this current broad market malaise. This latest move, a collapse in the BDI, forecasts trouble for markets ahead.

The bright side is that the faster the BDI drops, and bottoms, the faster it will start back up which tends to lead broad markets back up and signals an all clear.  The dark side is that the BDI is still collapsing so there is some pain ahead first. 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.

Note Added 1/13/12 at 3:00 PM:  BDI now printing 1050-ish which is matching the early 2011 lows; what a fall from grace it is.  Now that the price is at a matching or lower low, the indicators are set up with positive divergence so the punsihment is ending and price will recover.  The BDI collapse, however, warns of a weak global economy.