Breakwave Dry Bulk Shipping ETF (BDRY)

[JLmyhero]

Yep, knew something was up (see previous post)

https://www.zerohedge.com/economics/white-house-unveils-850-billion-economic-rescue-package-combat-virus-fallout

...going to turn my umbrella upside down to catch the falling Jeffersons.

[JLmyhero]

Faintest Whiff of Stagflation

STIPS shot out of the box this morning.

If there is one asset that LOVES MMT it's STIPS. Where money rains down from the sky.

Moved 1% out of VGSH into STRIPS and if these levels hold I'll do another 1% at the close.

There's one thing I don't what to miss out on and that's another bought of 70's stagflation!

[JLmyhero]

'should remain limited' -- well it didn't turn out that way!

https://markets.businessinsider.com/news/stocks/stock-market-outlook-investors-ignore-coronavirus-rebound-reasons-morgan-stanley-2020-2-1028890246

...guess they must have based their forecast on Trump's 19-virus hoax line.

[JLmyhero]

Sell USD! This could go down as one of the worst calls ever.

https://www.investing.com/news/forex-news/morgan-stanley-says-markets-are-bottoming-so-sell-us-dollar-2111112

...time will tell. We'll see who's right (MS or little old me) in six months. The time stamp is created by this post

[JLmyhero]

Seems people in the Treasury are reading my posts.

https://www.zerohedge.com/economics/plan-cash-handouts-gains-steam-congress-consumption-collapses

[JLmyhero]

Poor Donald, but then again he's at least a duck.

https://www.politico.com/news/2020/03/16/trump-recommends-avoiding-gatherings-of-more-than-10-people-132323

...Bad??? That's a no-no word for optimists. I guess his feet/webs must be getting wet too.

[JLmyhero]

Playing winning poker on a sinking ship.

Let me put you in the golden seat at a poker table. The golden seat means you'll have nothing but luck and never be unlucky. Almost impossible to lose in the golden seat. If you're a poker player a couple of times in your life you've had the indescribable joy to sit in it, and countless times to curse an opponent occupying it.

Imagine being the poor SOB sitting in the golden seat after the Titanic struck the iceberg, all the money in the world but nothing for sale in Davey Jones Locker. Being in the group the virus loves to kill, I can identify with, but do nothing to change the outcome...so let's keep playing.

Tomorrow we'll shuffle up and deal again. Oh crap, my feet are getting wet.

[JLmyhero]

UST Should Drop Money From the Sky

This is the MMT or modern monetary theory.

Demand is just a hand crank away from the printing press as the government bails out the consumer so Joe can buy a case rather than a single six-pack.

If the powers to be are interested in pumping water out of the Global Titanic every government should follow the lead of Hong Kong and start sending out checks.

Doing this would reverse the direction of DBA, OIL, BDRY, IAU, SPY, and most importantly STRIP... all of which I'd love to buy.

If only they would go up!

[JLmyhero]

Extending SH allocation from 2% to 4%

Currently still at 2% but as triggers points are hit on the downside I'll add.

[Marc812]

It is funny and sad but a couple of weeks before this crash I got a call from an Ameritrade rep chastising me for having such a conservative portfolio......so....when do the "powers that be" start sending cash to joe six pack?

[JLmyhero]

Today the world realizes the global ship is going down.

...some hoax, huh.

[JLmyhero]

I'll know when the bottom is in...PICB

Okay so I personally won't know, but the market will tell me. My canary is PICB which rolled over from a buy to a sell just yesterday after falling off a cliff this past week.

This bond currently has everything going against it from a risk on standpoint, being a corporate, growth dependent bond, measured in Euros/Pounds/CD. Only thing it has going for it is the investment grade label, but in this environment no corporate bond is investment grade!

If you took UST and added UUP you'd have the exact opposite of PICB.

So....

When PICB turns 'risk on' I'm moving out of UST and King Dollar 'risk off'.

However, as I mentioned PICB turned south just yesterday, and once it does it can run south (as well as north) for well over a year!

As Jesse Livermore so famously said: 'There is only one side to the market; and it is not the bull side or the bear side, but the right side'.

[JLmyhero]

Hey Marc. Monday the cash market is also pointing down.

After Trump juiced the market at the close the futures for both the S&P and oil tailed off. Trading in the middle east on today ( Sun.) is confirming a lower Monday. Action this week is on the Fed slashing to zero, but what the Fed should also do is QE Junk bonds... which means ALL corporates.

The Fed doing this will become Europe, and then when they buy stock, Japan.

https://www.marketwatch.com/story/wall-street-fear-flashbacks-to-2008-of-forced-selling-in-9-trillion-us-corporate-bond-market-2020-03-14?mod=article_inline

Big question is will this cause price inflation (I'd love STIPs) or only slow price deflation (currently loving VGSH). The markets will provide the answer over time.

[Marc812]

There is a 226 point expected move in the spx options market for the week ending March 20. It should be quite the week coming up.

[JLmyhero]

S&P Explodes up 6.5% in last half hour as Trump declares a national emergency -- what gives.

The power of positive thinking.

Optimists are at times (most of) the realists, but on rare occasions the pessimists.

So which philosophy (glass half full vs. half empty) will prove to be the realist today?

The optimistic 'the bottom is in' buy the dip with a 'V' shaped recovery + the government is now ahead of the curve and the additional spending and 0 interest rates will boost growth faster as they virus dies out, or a effective treatment/vaccine is found.

or...

The pessimists who see the government far behind the curve, first in testing and controlling the virus and now in inadequate monetary and fiscal policy to prevent the economy from slipping into a recession/depression. With both government and science proving impotent in dealing with the virus and economic falling out of rapidly rising unemployment and decreased spending.

Time will tell, and in six months from now well know who were today's realists.

In the mean time my money will go with the market. Unfortunately, the market today... looking six months into the future, sees the glass half empty.

[JLmyhero]

Allocations beginning the week 3/16... The Ides of March (Beware)

2% IEI 'on' / BDRY 'off'
2% IEF 'on' OIL 'off'
2% IEF 'on' DBA 'off'
2% UUP 'on' IAU 'off'
2% SH 'on' SPY 'off'

10% UUP

80% VGSH 'on' with STIP 'off'

100%

Changes from previous week:

1) Small percentage of BDRY closed out.
2) SH increased to 2%
3) BSV closed out
4) Additional UUP added
5) VGSH added.
6) Increased 'other' allocation from 10% to 20% with short bonds now at 80%
7) Eliminated all short corporate bonds from consideration until conditions improve.
8) Extended duration on BDRY pair from SHV to IEI

An absolute monster week to say the least. All risk has turned off with not a glimmer of light. Only safe places to be are: governments (ex-TIPS), short equities, cash, and King Dollar (UUP).

Using the 2008-09 time line as a reference guide the market today mirrors mid-Sept. 2008. It took six months to bottom out from there.

This portfolio is now in a maxed out bear position. Grrrr...

[JLmyhero]

BDRY, sing: "I'm free, free falling"...(repeat)

Hurt like Hell when TP passed.

Global economy ain't looking good any time soon.

PS. The small bit of BDRY that was held going into this past Monday has been sold.

[JLmyhero]

Added the DEATH STAR asset this week.

Exciting week to say the least
Updates after Fridays close.

Teaser: added a significant position in the DS asset ... the USD or UUP

In a total global meltdown all assets ( including UST) collapse into the death star.

UUP is only a buy when SHY is the dominate short-term holding... which it is!

[JLmyhero]

Day 4 of 14 = 10 days to go until...

The end of the economic world as we know it.

On day 14 (if the US follows Italy's lead) the entire US of A will be under house quarantine.

Needless to say stocks will not react favorable when the Grim Reaper swings his scythe destroying the life savings of so many.

Will the Fed come to the aid of the market and be the only bidder for untold trillions of dollars of stocks and junk bonds... stay tuned.

[JLmyhero]

A LONG way down from here until the bottom is reached.

https://www.investing.com/news/economy/investor-fears-rise-over-recession-bear-market-as-coronavirus-spreads-in-us-2104214

[JLmyhero]

20 + 40 /2 = 30... Stock market has a long tumble ahead.

Only 20% of Rep. and 40% of Dom. consider the virus to be a major problem.
Once this changes to 100% the bottom is in.

[JLmyhero]

Negative Shipping News...3/5

https://worldmaritimenews.com/archives/292065/20-capesize-bulkers-scrapped-already-in-2020/

...when the turn comes in could be impressive. High scrape rate, low orders for new ships, + higher demand = snap back. Now the only question is when the snapback. The answer will be provided by Mr. Market when he's good and ready.

[JLmyhero]

Allocations beginning the week 3/9

1.98% SHV 'on' / .02% BDRY 'on'
2% IEF 'on' OIL 'off'
2% IEF 'on' DBA 'off'
2% UUP 'on' IAU 'off'
1.6% SH 'on' .4 SHV 'on' / SPY 'off'

90% BSV 'on' with STIP, FLOT, BIL, and NEAR all 'off'

100%

Changes from previous week: SH increased .4%, BDRY initiated.

[JLmyhero]

'Investor' defined: a trapped, bag holding trader.
Goal in life for all traders is never become an 'investor'.

[maddog27]

Bull just taking a break. History will repeat. Super moon Monday, www on the 11th and panic thinking like 1930 depression have the masses selling. One of these up moves won't be backtested.

[JLmyhero]

Death struggle agonies against a python.

... the victim is always a bull or a bear?

It's very difficult watching a superior mammal (having feelings) struggle against the all powerful reptilian (non-feeling) python.

The more the poor creature struggles the higher the coils wrap until suffocation.

The python over the past 10 years has had a steady diet of bears, but now has a bull by the nose wrapping it' coils around it's neck.

Nature sometimes is not easy to watch!

[JLmyhero]

Now back to 60% SH as the USS Titanic (stock market) violently bobs up and down struggling against the inevitable

[JLmyhero]

Oops... misspoke. SH is now down to 40% of allocation.
Market is bouncing up and down like the Titanic.
Good chance I'll now be down to 20% by the market close tomorrow.

[JLmyhero]

Picked up .02% of 2% allocated to BDRY.

...I'll be add'en if the price keeps grow'en. They say the best time to buy property is when blood runs in the street.

[maddog27]

As da cheif would say: c wave gets em everytime

[JLmyhero]

Excellent chance I'll be 80% SPY short (SH) at the close tomorrow.

...this bear market 'could be' (don't know if it will till after it is) a bleak as the '30's.

[JLmyhero]

Lord have mercy on the market!

I'm in a row boat with straight bonds (having one of the best day's in my life), but the screams from the people going down with the ship is deafening. I think I row a bit faster, it's not polite to listen to others suffering.

[JLmyhero]

Catching the smallest of shivers of price inflation today.

Moved 2.5% from BSV to STIP.

[JLmyhero]

My Current Allocations 3/3/20

2% SHV 'on' BDRY 'off'
2% IEF 'on' OIL 'off'
2% IEF 'on' DBA 'off'
2% UUP 'on' IAU 'off'
1.2% SH 'on' .8% SHV 'on' SPY 'off'

90% BSV 'on' with STIP, FLOT, BIL, and NEAR all 'off'

100%

[JLmyhero]

Thanks for the link.

Near-dated futures are for the BDRY are 3 mos. average. Which certainly isn't spot. Also interesting the mix in shipping sizes the index covers, I was under the impression it was capsize only.

So right now, today, I have the $BDI (which you can't buy) as a buy, but BDRY hasn't even met one of my two conditions for a buy.

BDRY being a future is selling lower than the $BDI spot. This obviously means that the world is headed for a big time slow-down.

I did back testing on buy and sell signals for both $BDI and BDRY (given it's limited history) which were almost identical...until now.

All makes sense now. Thanks again for the link.

JL.

[maddog27]

Not spot based but futures contracts. You should read this: etfmg.com/funds/bdry

[JLmyhero]

Insightful analysis from a shipping professional

To add to the experienced freight market insights of others: cape pricing has actually been decimated in recent weeks by supply side events, particularly devastating rains in Brazil since mid-January and to a lesser extent Cyclone Damien impacting Western Australia's Pilbara region in early Feb. Combined, they have caused significant iron ore supply destruction, amounting to c.20mt. This equates to 250mt annualised or 20% of typical supplies. In the coming 2-weeks, China will receive these lower tonnages, which on the flip side will partly contribute to iron ore price support...

[JLmyhero]

Stocks explode on optimism, BDRY sinks on reality.

Hope + last weeks short covering sent stocks to there greatest point gain...EVER, today.
BDRY however, being reality based sunk 3.5%, off 5% at one point.

China can play with their virus numbers, and they can play (buy) their markets... but they can't influence demand for ships to move the output (or lack there of).

[JLmyhero]

Bull market climb a wall of worry and bear markets descend a slope of hope.

Whole lot'a hope out there:

1) Central banks will save us.
2) Tax cuts will save us.
3) Warm weather will save us.
4) A vaccine will save us.
5) A treatment will save us.
6) IF China is too be believed, the virus has peaked, and there's nothing but blue sky ahead

...in the mean time, until we're saved, the BRDY, moves lower and lower.

[JLmyhero]

MD thanks for the comment.
Yep, the trading volume has improved greatly over the past year the increase in liquify is one thing that attracted me to BDRY.
You mentioned 20% bonds... any idea what they are keyed to?
Thing I love about the index is that it is a spot price with no futures. This means the shorts can't pump and dump like they do every other asset in the world.
A great real time measure of of the Pacific cargo business cycle.

JL

[maddog27]

I've been following this thing and it does move with the bdi but not in % terms. There are bonds in this etf...20% maybe. The OS is rising here which makes sense given the volume but thats good because volume wasn't tradeable last year. We'll see it its artificially propped by the specialists or not once the distribution is over.

Its at bottom of a parallel channel...usually a good entry. Have to pick a spot and take some risk. Would love to hold until December if it lets me.

[JLmyhero]

BDRY is a direct China to USA play.

The baltic dry index is made up of three weight classes of ships with the capsize being the largest and primarily run from Asia to USA. The two smaller sizes run the Atlantic.

The cool thing about BDRY is the index only measures the capsize market. Over the last week $BDI (Baltic index) has had a nice pop, but BDRY is dead in the water. With all the virus concerns in Asia that's understandable.

[JLmyhero]

Current position in BDRY is zero, with the 2% I allocated for purchase being held in SHV (very short-term treasuries). As a follower of Jesse Livermore, I patiently wait for my moving average indicators to cross sending me a buy signal. Looks like I have a bit of a wait ahead -- lol.

[JLmyhero]

New to the board, looking for informative conversation.
I manage money for a home office. Ninety percent is in short-tern investment grade debit but ten percent is in the mnemonic BASS DOG.
B for long-term treasuries (IEF), A for agriculture (DBA), S for SPX (both short and long), S for shipping (BDRY), D for US dollar (UUP), O for oil (OIL), and G for gold (IAU).

I've recently added BDRY and would appreciate any info you have on the ETF as well as your opinion on price direction.

Thanks.

[maddog27]

Volume before price. May just be distribution from the ETF owner since it did/does have a small float. Worth a shot here...may gap down and take you out

[maddog27]

Seasonality is up here to middle of march. Virus shipping delays could up prices. Some seasonality facts.

There is a general fall in the BDI Index from the beginning of January to early February. It is prominent in the composite and the bear market years while in bull market conditions, the Index is flat during this period.
The Index rallies robustly from early February to early March and then falls off from mid-March to mid-April regardless of market trend.
BDI rises in a steady manner from mid-April until late May (bear market years) or early June (bull and overall market years).
In bear years, the Baltic Dry Index undergoes a steep decline from late May thru mid-June and then steadies during the early summer. Beginning in late July it undergoes a steady downtick for the remainder of the year.
For overall and bull market composites, the BDI is flat and oscillating during the summer months. Then it goes mostly higher from mid-September thru early December, except for a pause in late October to mid-November.
In all cases, there is a significant drop-off in the Baltic Dry Index during the second and third weeks of December. The BDI is not posted from Christmas thru New Year’s.
Now let’s explore some factors that can account for the well-defined seasonal trends in the Baltic Dry Index:

The early January to early February fall is attributable to wintertime shuttering of some mine operations and ports and the Chinese New Year when that country shuts down for about two weeks.
A rally occurs over the next month as economic activity in China resumes.
The mid-April to early May rise in BDI is likely caused by building of inventories in copper, timber, steel, and cement in anticipation of peak Northern Hemisphere construction season.
In addition, bunker fuel is costlier in the spring when crude oil prices generally rise as American refineries ramp up for summer driving season.
BDI is flat during the summer months while construction activity uses stockpiled materials.
Rates tend to rise from mid-September to late October when grain harvests are shipped and customers re-stock commodities (especially steel-making materials and thermal coal) in advance of the Northern Hemisphere winter.
A lull then occurs before rates generally move upward again from mid-November thru early December when China imports more iron ore from Australia and Brazil in advance of their wet seasons.
Freight rates drop as economic activity winds down in North America and Europe in mid- December.

[TeddyCaswell]

Yes time to move

[maddog27]

Small market cap but mirror of Baltic Dry Index...might be fun one to hold for a few years as this bull evolves