This in follow up to my February post pondering if the shipping index had bottomed which was most definitely chucked in to the round file by most as the market has become convinced the industry is dead. I still beg to differ.
Being a big believer in moving averages, if I see a stock or Index with rising moving averages, I take it as a sign of buying within a name. That being said, if I see falling longer term moving averages (100d and 200d), that to me signals trouble; stay away or short any pop. However when I see longer term MA's flattening.......my curiosity is peaked from a bottom fishing point of view. My first thought…
Leading up to the market peak, shippers made the fatal error of buying the boom frenzy and ordering the construction of new ships. Once credit markets constricted it was too late for shippers to turn back. By 2009 the dime had been dropped, orders placed, payment promised, they saw a total a total collapse of freight rates; each battling the other for dwindling world wide business (see video)
Many traders believed QE would lift all boats (pun intended) and struggled over and over again to find a bottom in the Baltic Dry Index but to no avail. Wasn't China going to stockpile again? For years we had be "programmed" to that belief. Many…
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