Email of the day 1
Comment of the Day

December 27 2013

Commentary by David Fuller

Email of the day 1

On the new Chart Library, Baltic Dry Index and shipping stocks:

“Gentlemen; Happy holidays to you both. I was looking at some charts in the evolving library, which I agree is becoming superior to its predecessor, and noticed that the Baltic Dry Index has made some dramatic moves upward in recent months as have some of the shipping stocks. I'd be interested in your assessment of this sector.”

David Fuller's view

I am glad to hear your  thoughts on the evolving Library.  We have always had ambitious plans for it but the difference is that we now have the cooperation to fulfil these aspirations for the benefit of subscribers.

Thanks also for sharing relevant observations following your recent review of the Chart Library.   

Thanks also for sharing relevant observations following your recent review of the Chart Library.  Looking at this 10-year chart, the Baltic Dry Index (BDIY) has now broken above its 2011 high within a large Type-3 (churning, time and size) base as taught at The Chart Seminar.  This is consistent with the gradually improving global economic recovery led by USA and many other countries.  I would continue to give the upside the benefit of the doubt for BDIY, at least while it maintains this year’s progression of higher reaction lows. 

This 10-year chart above also reminds us of an important story.  Shipping companies, convinced that they would always be contracted to deliver ever more commodities to China, embarked on a building binge which was suddenly ended by the 2008 crash.  An inevitable rebalancing in terms of supply versus demand occurred in the shipping sector following 2008 but we should now be seeing some signs of recovery in line with GDP growth. Interestingly, the Claymore Delta Global Shipping Index Fund (SEA US), listed in June 2010, has just completed a breakout from its latest lengthy consolidation. I believe this is an ETF and it is also listed on Bloomberg as the Guggenheim Shipping ETF.  You can also find these recovering shipping shares in the Chart Library: China Shipping Development (1138 HK), Pacific Basin Shipping (2343 HK), Sinotrans Shipping (368 HK), Diana Shipping (DSX US), Great Eastern Shipping (GESCO IN), Precious Shipping (PSL TB), ETFS Russell Global Shipping Large Cap Fund $ or £ (SHIP LN) and Teekay Shipping (TK US)

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