Continuing carnage – Baltic Dry Indices: Week 5 commentary.



(Even if it seems hollow in the face of these dry bulk numbers….)


For Week 5 the Handysize index carnage continued, once again gapping down at the open and even accelerating the plunge to a 311 fix, as can be seen on the candlestick chart. With most of the indices in a race to the bottom ahead of the Lunar New Year, all bets appear to be off.

No influence from our previous downside target in the low 400s was seen. Any projections for future targets were reached and surpassed within the weekly period. The RSI was not only in single digits, it reached a single digit at barely above a value of 1.

The heavily negative and lagging MACD also plunged, with
indicators giving no clear idea of an upcoming resting zone for possibly the next week or so.



The Supramax index also continued its swan dive in Week 5 and perhaps stating the obvious, our pessimism about any support developing was confirmed. Closing at a 450 fix with no lower target in sight as yet, the upcoming Lunar Year could well extend the gloominess.

With the RSI at 4.20 and the lagging MACD plunging well into negative values, an overall wait-and-see attitude pervades the atmosphere. The only saving grace may be the relative leveling-off of the RSI indicator,which may hint at an as-yet-unseen consolidation area.

The indices are in the basement along with their indicators, and those nasty industry fundamentals will have to run their course.



The Panamax index followed the Handies and Supras in Week 5, accelerating its plunge to a 560 Friday fix. As expected, any influence from the low 700s area never materialized.

Like the Supramax index the Panamax RSI also showed some consistency, leveling out somewhat at 7.19. This small divergence in the RSI may hint at some kind of upcoming hesitation in the headlong dive. The lagging MACD followed the index as it plunged further into negative bottoming (bottomless?) values.

We were tempted to suggest a downside target (“area of
influence” perhaps?) in the low 500s zone, but the Panamaxes are dangerously close to that value now.
An understatement maybe, but confidence is not high.



In Week 5, the Capesize index was seemingly infected by the malaise in its sister indices. Buckling at the knees and dropping to our 1000-1050 downside target area, the index closed at 1014. Whether the 1000-1050 area gives any support remains to be seen in the face of the overall dry bulk shipping collapse.

Having broken out of the past month’s doldrums, the Capes showed an RSI dropping slightly below neutral at 37.29 and a MACD that completed its crossing of the signal line to the bearish side.

To acknowledge the fundamentals, the re-shuffling in world trade, Chinese iron ore specifications and also the tragic Brazilian tailings-dam disaster are no doubt having an effect. With the present grim situation a downside target in the mid-300s area isn’t out of the running, with our hope for a rest in the 500s somewhere.


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