Home > commodities, market analysis, quantitative analysis, technical analysis > Commodities & Baltic Dry Index Diverge

Commodities & Baltic Dry Index Diverge

Commodities are higher today even when the Baltic Dry Index is poised to post a 7th consective weekly decline totaling 50+%… the last time BDI declined for 7 consective weeks was from Sep 09 to Oct 09 for a massive 86% drop… prior to that drop the BDI declined for 9 consecutive weeks for 44% decline!… Is the current drop a prelude to a bigger this Fall?

Chart showing consecutive weekly declines in Baltic Dry index

Source: stockcharts.com

This chart shows negative divergence between the BDI and CRB Commodities Index… the BDI is considered a leading indicator and hence the Commodities index should follow the BDI… are commodities meant to go down?

Chart of Baltic Dry Index & CRB Commodity Index as of 13-Jul-2010 showing negative divergence

Source: stockcharts.com

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