[BDI] Baltic Dry Index update

Mein Gott.  The Baltic Dry Index (BDI) is at an all time low.  This is absolutely worse for them than anything seen during the Great Depression.



Every single name in that sector is trading in the dirt.  But I'm looking at the earnings conference calls of those companies and they are selling assets, renegotiating with banks, writing down losses in a very calm and organized way.  It's just incredible to see it play out.  Even the quality names with stronger balance sheets like Diana Shipping (DSX) are in freefall.  But I don't think this will continue much longer because I don't think it CAN continue much longer.  First off, when the BDI index begins to catch a bid then all of these dry bulkers will catch a bid.  And dry bulk day rates are strongly tied to commodity prices.  The chart above looks very much like AT LEAST 3 of 5 is done and ready for a bounce. 

What kind of bounce you ask?  Yes, a vee bounce because 2 of 5 was sideways.  This jibes with my model that says that USO will be a vee bounce into wave 4 into 2016.  Yes I know oil is not dry bulk but all commodity charts look very similar right now. 

If dry bulk rates increase rapidly into 4 of 5 then you can bet that beaten to shit dry bulker shares will bounce even faster.  This is nothing more than a game of pump and dump blink.  All of the bulkers cannot go out of business.  The survivors will end up with all the ships, the weak ones will die off and then the survivors will fix prices like they always do and run the prices up again.

By the way I see FXI as being in 3 of C as well with a 4th wave coming soon.  Commodities are all about China and their market crash is getting long in the tooth IMO. In fact, according to many models I have seen, many 3rd world indices are just about done correcting.  Below is the chart of EEM, the emerging market ETF.I expect a bottom in the red circle somewhere.  Note how the wave down from blue 4 is now the same length as blue 1.  This could mean that it will be a short stroke 5th, very rare these days and so if it happens we must understand that what we are seeing is rare and the implications it will have on commodity prices.  This could also in fact be B of 4 with another wave coming up soon to lime green 4 (the level of the prior 4th).  Or it could just make a lower low and be done with it the old fashioned way.