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Probability Conviction Level: Slightly Negative

|Includes: IYY, Invesco QQQ ETF (QQQ), SPY

The Probability Conviction Level is slightly negative for this week. This is an indication that there is a positive probability for potential losses in the global equity markets. It is primarily driven by negative Copper Futures and negative BDI (Baltic Dry Index) movement.

Copper Futures:

Copper Futures, a forward looking indicator of global economic activity, are illustrating an initial lack of conviction as it opened up to the downside. We have seen strong movement in Copper Futures for the last few weeks. To see positive price movement take a break this week or just hold at current levels wouldn't be out of the question.

Baltic Dry Index:

The Baltic Dry Index seems to have lost steam last week as it steadily declined throughout the period. This points to a short-term decrease in the demand of contract shipping rates. As well, there is some concern that the addition of new ships to the global fleet may drive down rates in the near term. This could potentially alter the accuracy of the BDI as a forward looking indicator. I do not feel that this is the case yet.

Probability Conviction Level:

The Probability Conviction Level is a custom indicator. The basic concept is that it provides a probability level and indication for potential positive or negative movement in the coming week global equity markets.

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