Monday 20 January 2014

The EU PIIGS are still rising

Despite the huge underlying macro-economic problems, the equity indexes of the EU PIIGS are still broadly rising. This bodes well for the stronger economies/markets of the USA, Germany, and even least into the late spring.

Greece, monthly

Italy, monthly

Spain, monthly


There is little to add from my recent world monthly index update from two weeks ago.

Suffice to say, the broader up trend does continue, and unquestionably, that is a bullish sign for most of the world equity markets, not least the USA, Germany, and Japan.

The late spring targets for Greece, Italy, and Spain, remain 1500, 22500, and 12000 respectively.

If those are hit, it'd probably equate to sp'1950/2050, with Dow 17250/500

a little more later, probably on the VIX

BDI - warning of trouble?

Good morning. Futures are..well.....there is no future today :).  One of the most notable surprises of the year so far is the collapse in the Baltic Dry Index (BDI), which has fallen 37%. A break under 1200 would bode badly for those seeking at least a few more months of broad equity upside.

BDI, weekly

BDI, monthly


*I will be posting some sporadic and somewhat random things across the stay tuned.

So..the BDI has been smashed lower. Certainly, my original upside target for the late spring was 3000/3500..even the 4000s seemed a 'just viable' target..along with sp'1950/2050.

Yet..are those bold targets out of the window now?

Baring a break <1200, I still think the BDI could swing back upward, and if we see the 2000s - at least a little in February/early March, then the original late spring target zone of 3000/3500 is still viable.

BDI impacting the shippers

The shippers - which were seeing some significant breakouts to end 2013, have naturally been whacked lower. DRYS is a good example....

DRYS, weekly.

DRYS snapped into the lows 5s..only to see around 25% knocked off..back into the upper 3s.

If...and it is a big if now...the BDI can break back >2000, then DRYS should test the recent high in the 5s, and then proceed into the 6/7s.

One final thing to note about the shippers, you can see the huge trading volume increase. That seems likely to remain the case for much of the spring..if not the year.