Tags: baltic | dry | stocks

Shipping Index Will Forecast Stock Rebound

By    |   Monday, 17 Nov 2008 03:45 PM

Looking for reliable economic indicators?

The only one worth considering now is the Baltic Dry Index (BDI), which tracks the average daily price for shipping raw materials, says contrarian investor Louis Basenese.

“If you’re looking for a clear indication of a market bottom … just look for the Baltic Dry Index to start trending noticeably higher,” Basenese writes in Contrarian Stock Market Investing News.

The BDI leaves no room for speculation, isn't subject to revisions, and it can't be manipulated because it isn't tradeable, Basenese points out.

It clearly provides “a precise and rare measurement of the volume of global trade at the earliest possible stage," he says.

A sharp move up signals global trade is increasing; a sharp move down shows it’s decreasing.

“Since global economic activity ultimately influences the equity markets, sharp moves in the Baltic Dry Index often predict and precede similar moves in the equity markets,” Basenese says.

The BDI has declined 93 percent since hitting a record high of 11,973 last May, dropping to below 1000.

“The decline came fast and will be gone quickly,” Chinese premier Wei Jaifu said at a recent shipping conference in Dalian, China. “The worst has passed already.”

“The unusual drop was because of investors’ panic amid the global financial tsunami,” Wei said.

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Looking for reliable economic indicators?The only one worth considering now is the Baltic Dry Index (BDI), which tracks the average daily price for shipping raw materials, says contrarian investor Louis Basenese.“If you’re looking for a clear indication of a market bottom …...
baltic,dry,stocks
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2008-45-17
Monday, 17 Nov 2008 03:45 PM
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