The Baltic Dry Index (BDI) is a key global bellwether of economic activity. Ships transfer coal, coke, iron ore, steel, grains and many other cargo's that grease the wheels of the global economy. If the global outlook shows encouragement moving forward, the Baltic is one of the first places to look for recovery. Once the raw materials are moving across the ocean waves, good times are ahead. Alas, the Baltic peaked in late 2009 and 2010 and is in the doldrums ever since. There are many new ships coming on line so that has to be factored into some of the weakness, however, overall, the chart clearly shows that the stock market rally is created by the Fed and BOJ easy money policies and not by global economic activity.
The downward-sloping channel remains in play with price at the top rail contemplating a break out after recent years. The bule sideways symmetrical triangle, and sideways triangles for the indicators shows that a major decision is on tap, up or down. The Baltic is in the cellar for so long that up appears the only path forward but in these markets anything can happen. China and Asia is slowing down. Europe remains in recession and depression. Everyone touts the U.S. economy but 25 million remain unemployed or underemployed with little hope. The joyousness in the U.S. is simply due to the pumped-up stock market due to the Fed and BOJ. A breakout above the top rail of the channel will indicate that the global environment is healing and would signal that months ahead the economic activity will pick-up across the globe as delivery of raw materials increase, however, if price stays within the channel, and breaks under the lower blue trend line of the sideways triangle, the global malaise will continue and the question will be how long can the Fed and BOJ keep the markets pumped when economic conditions remain in a malaise. 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.