Baltic Dry Index Winning Streak Dead at 17 Days

After a 17-day winning streak in which the index rallied by 136%, the Baltic Dry Index fell 3.2% today and is back below 2,000 for its first daily decline since January 20th. Even after today's decline, the index is still up 200% from its low of 663 back in December. At this point, equity investors would take a 10th of that gain.

click to enlarge

Comments

[Moon Kil Woong:]

Wow what a healthy chart... yay. Now can we go back to work and stop talking about this raging phenom that indicates a bull market?

Feb 12 10:31 PM

[The Virtual...:]

The index is still down 85 pct from its highs. Shipowners are still very cautious that the Chinese are merely stockpiling Iron ore in preperation for new trade talks.

Feb 12 10:44 PM

[Mark Anthony:]

Don't cheer BDI rally dead yet. How often do you see something that keeps going up for 17 straight days? How could you not make a bullish case when you see a continuous 17 days straight up?

Be realistic, nothing keeps going up. No can any one expect something to increase 5 or 10 fold overnight. The BDI rally merely pauses here before continuing on to higher level.

The global shipping sector remains bullish because the fundamentals are still bullish. The recent plummet of BDI in 2008 was NOT caused by supply/demand, but caused by trading credit freeze up. Read here:
seekingalpha.com/artic...

Let's see what the BDI does next week.

Feb 14 01:43 AM

[Oraclepkwy:]

I agree that the BDI is simply taking a temporary 'breather' and that the upward momentum will continue. I have read nothing that leads me to believe that the temporary reversal in the BDI has been caused by anything material. And like one of the posters above stated, nothing keeps going up forever uninterrrupted. Its simply a time for caution and to keep a close eye on the BDI to be satisfied that the upward trend will continue before anyone should get excited.

Feb 14 03:07 PM

[Mark Anthony:]

Here is my formal long response to "BDI Rally is Dead":

stockology.blogspot.co...

Enjoy! The BDI rally is not dead, by a long stretch! Nothing that rallies for 17 days can be declared dead on the 18th day. You really need to look into the fundamentals instead of concentrate on day to day variations. There is too much oddity in any day's charter fixing so nothing wrong if occationally the index drops a bit.

Feb 15 12:51 AM

[Mark Anthony:]

Is the BDI dead? It is dead for two days and by the third day the rally is alive again. This time let's see how long the winning streak will last.

Feb 18 04:30 AM

[Mad Hedge F...:]

Oops. If you are not a captain on a bridge somewhere, ready with orders to repel boarding pirates with fire hoses, you might be forgiven for being unaware that the Baltic Dry Shipping Index ($BDI) has gone up an unbelievable 20 days in a row. This market for bulk cargo charter rates made investors seasick last year when the near complete shutdown of international trade and a cessation of credit took the index down a mind boggling 94%, from 12,000 to 650. At that level, the market was pricing in a probability that no ship would ever sail anywhere again, and that the global fleet would permanently rust at anchor. A slow thawing of credit has drawn in some hot money that has taken the BDI back up to 3,400, a handy 560% gain in six months. It has also been matching the revival of commodity markets tick for tick. The chart below looks like crude with a turbocharger. In additional to being a favorite topic to impress friends with at dinner parties, the BDI has also become a favorite of the “green shoots” crowd as proof that the world is not going to end after all. After so many things have had great runs, there are a lot of charts that look like this now (Crude, FXI, etc.). This one is just the most extreme.

May 29 07:33 PM