Baltic Dry Index Up 225% On The Year

shippingChris Kimble: The S&P 500 (NYSEARCA:SPY) has had a good year, up almost 30%. The yield on the 10-year note is up over twice that much, up 70% YTD. Can you name the index that is up almost 200% more YTD than the S&P 500?

The answer is … The Baltic Dry index, which is up 225% on the year. At one time many felt like this index was a good indicator of global growth or lack of. Then a period of time came when many believed that the shipping industry became overbuilt and this index lost its value as a leading indicator.

Click to View

Click for a larger image

Is this rally a reflection of global growth, an oversold bounce after a massive decline or just noise? Is this strong rally part of the reason interest rates shot up so much, or just noise?

Click to View

Click for a larger image

Many look at the Baltic & Shanghai index as reflecting global conditions of the largest population on the planet. As we finish 2013, both of the Baltic & Shanghai find themselves at key price points that could say much about where they might be a year from now.

Noise or important message? If one uses these two to guide positions in the S&P 500 over the past couple of years, they come closer to being noise than substance. A breakout from these key resistance lines could be a positive global indicator. We will see if these two happen to breakout and what impact they might have on portfolio construction and lagging commodity performance in 2014.


For information about Kimble Charting Solutions, send an email to [email protected].

This article is brought to you courtesy of Chris Kimble which appeared at Advisor Perspectives.

Leave a Reply

Your email address will not be published. Required fields are marked *