Wednesday, October 01, 2008 3:18:59 PM
BDI broke down. Hit 3217 today. That is not good for the dry shippers. I expect a few of them to start going bankrupt is prices stay as low as they are. Last years newbuild glut killed them. Best course of action is to take older builds and sell them for salvage. Instant cash and bolsters survivability.
In other news here is a thought experiment using MACD unconventionally. Mapping MACD range over bear and bull markets. It's a poor mans VIX if you ask me. But volatility goes hand in hand with bear markets. Not that you can't have volatility in bull markets just that you rarely have complacency in bear markets.
Bull markets are inherently complacent as people systematically contribute monthly to 401ks and institutional funds. The short term trading that these funds do to try to capture small profits give you the day to day noise and makes it difficult to see the trend. That trend was the steady influx of money into the markets. Complacent influx. Small traders race into markets trying to catch a single stock rally, they represent a penny's worth in regards to the capital that flowed into th market on a timely basis. Long term daily charts like this can compress that noise and drown out the swings. You can then see the forest from the trees.
Te bear is not done. MACD has not significantly diverged from falling prices. In fact MACD seems to be sideways below zero confirming the long term downtrend.
In other news here is a thought experiment using MACD unconventionally. Mapping MACD range over bear and bull markets. It's a poor mans VIX if you ask me. But volatility goes hand in hand with bear markets. Not that you can't have volatility in bull markets just that you rarely have complacency in bear markets.
Bull markets are inherently complacent as people systematically contribute monthly to 401ks and institutional funds. The short term trading that these funds do to try to capture small profits give you the day to day noise and makes it difficult to see the trend. That trend was the steady influx of money into the markets. Complacent influx. Small traders race into markets trying to catch a single stock rally, they represent a penny's worth in regards to the capital that flowed into th market on a timely basis. Long term daily charts like this can compress that noise and drown out the swings. You can then see the forest from the trees.
Te bear is not done. MACD has not significantly diverged from falling prices. In fact MACD seems to be sideways below zero confirming the long term downtrend.
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