What We're Reading

The chart says it all.  I will be adding to my shipping drawer stock $NAT here.  Maybe the shipping index truly has been an indicator of true global (low) demand coupled with an oversupply of ships and heavy debt but charts do not lie.  People do.  Funds should be adding to their positions down at this test of prior breakout support.  We may build a long base, which is healthy.  Add at the lows.  I will still hold my (alert) stop comfortably below the 2012 low (not by a few pennies either).  They may even try to shake out weak hands by taking out that low before reversing however I'm undaunted.  Come on, bring it.  I'll buy more at these prices as global economies begin to heal and M&A should pick up in this beaten up sector.

This in follow up to my February post pondering if the shipping index had bottomed which was most definitely chucked in to the round file by most as the market has become convinced the industry is dead.  I still beg to differ.

Being a big believer in moving averages, if I see a stock or Index with rising moving averages, I take it as a sign of buying within a name.  That being said, if I see falling longer term moving averages (100d and 200d), that to me signals trouble; stay away or short any pop.  However when I see longer term MA's flattening.......my curiosity is peaked from a bottom fishing point of view.  My first thought "is the bad news over and is it putting in a bottom?

After writing my February post, I put my money where my mouth was and bought $NAT looking for a reversal out of it's bottom (which it did) and today it absolutely plowed through it's 200d where I banked partial. 

Do I believe that it will hold?  No.  With so many shorts it's certain to be faded *and

Leading up to the market peak, shippers made the fatal error of buying the boom frenzy and ordering the construction of new ships.  Once credit markets constricted it was too late for shippers to turn back.  By 2009 the dime had been dropped, orders placed, payment promised, they saw a total a total collapse of freight rates; each battling the other for dwindling world wide business (see video)

Many traders believed QE would lift all boats (pun intended) and struggled over and over again to find a bottom in the Baltic Dry Index but to no avail.   Wasn't China going to stockpile again?  For years we had be "programmed" to that belief.  Many simply did not comprehend the impact of world-wide tightening and slowdown, even in China.  Voracious demand did not return and oversupply of vessels meant freight rates continued to see pressure even with the Feds money printing as new ships continued to be delivered.  

Then finally, a glimmer of hope.  Moodys projected that most new ships would b