Shipping Gold

With the bottoming of the BDI and a breakout in HUI/GOLD, here are two stocks to watch.

There might be a quick short in AEM, but longer term, it's looking like a market leader.

DSX is getting extended, but buying the dip is an attractive proposition.

The market is still in bad shape and exhibits stupefying volatility, but if there is more dollar weakness and treasuries begin to fall, miners and shippers will offer great returns.

Ratio Roundup

My indicator was down today, but not broken. One sector is in critical danger.

The financial sector made a new O today, indicating an increasingly volatile and bearish environment.

The buywrite/index ratio is rising (bearish), but it approaching a falling 10sma (bullish).

This breakout in the HUI/GOLD is bullish for gold stocks, so I'm buying the dip.

Long/short commodities vs long commodities looks attractive here, but keep a short leash.

Risk appetite has yet to return as treasuries still outperform junk.

Banks look ready to fall again. Tomorrow will be crazy, and though we may see a rally, I think the market is ready to roll over. Hopefully gold will pullback, but if the dollar can't find support by Thursday, I'll be rolling into shiny yellow bricks and yen.

Monday Mutterings

I hope to God that the chart below is a misprint and not a premonition.

If bonds make a move like that, this crisis is going to take a turn for the worst.

Though we closed positive Friday, my indicator fell, suggesting a bearish divergence in an uptrend. Buy on the dip is still in play, but sell on the rip may soon be in order.

The spread between US Equity and Bonds is battling with resistance. A resumption of the downtrend is likely, but has yet to be confirmed.

Yen versus USD continues to be a winning trade.

Priced in gold, the 30Y Treasury has pulled into support. Until this trend breaks lower, inflation plays will move lower or sideways.

This market is giving lots of mixed messages. I'm expecting range bound trading if volume is low, and a volatile break down if shares start to move. This means I'm most unprepared for high volume accumulation and mark up, so I will be watching for such action like a hawk.

On another note, I'm starting a computer service company in Seattle, so if anyone has arcane suggestions, please feel free to leave a note.

A New Hope

The Baltic Dry Index has been falling for months, but that may be changing.

If you look closely, the index has registered its first X since September.

This is a good sign for the badly beaten shipping sector, as well as the global economy. For those unfamiliar with the BDI, it is a benchmark for global shipping rates, and is a measure of the impact the credit crisis is having on the real economy. Rates are falling as letters of credit have become increasingly rare. While this short term trend change may not translate into a bull market in equities (there are plenty of other problems), this may help provide a bottom for shipping stocks.