By Sellputs
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| Image: Bloomberg |
Perhaps the BDI is telling us the summer commodity rally has some legs to it. As you can see from the chart the index is still well off it’s highs put in back in May of 2008. From May 2008 the index has collapsed as commodities and world trade ground to a near halt. The index trended off a low of 663 in Dec of 2008 to high of 4632 only to trade flat until breaking down in May of 2009 as economic slowdown fears gripped the market.
On about July 12 the index caught support as world commodities specifically grain rocketed higher. The index needs to move above the 5000 level to signal a true reversal, if the commodity rally continues into the fall we may see this. If not, we may be heading back to lows as companies around the world feel the pressure of a slowing US/world economy.
