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.

State Of The Market

A few market signs for the lost. The following precipitous graph is an example of the impact the financial crisis is having on the real economy.

The BDI indicates how much shippers get paid for carrying freight. Due to the unwillingness of banks to write letters of credit for merchandise, shipping is mired in a death spiral.

US Bonds continue to outperform US Equities.

The NASDAQ continues to hold on by the skin of its teeth, but with the risks so high, holding equities overnight is a game for people much braver than I.

Less NASDAQ stocks are above their 50dma, but if the index doesn't collapse tomorrow, we could see a short squeeze.

Nevertheless, the NAMO is a tad overbought, so I expect choppy trading for a day or two. Time to take photos, sculpt, and learn to play music.

The market is still volatile and thus provides great opportunities. On the other hand, my trading costs are starting to rise as I get whipsawed and suffer prolonged cognitive dissonance. I'm trading with small amounts, trying to find/keep a rhythm, but nothing seems quite clear after today.

P.S. Has anyone else in the blogosphere suffered ISP problems during very volatile market days?