We follow this one each week in NFTRH’s Global Market Internals segment.
When I was noting the curious positive price divergence (most recent spike) by this shipping cost index to global stocks and commodities in Q4 an astute subscriber advised that this was likely due to shippers front-loading their shipments before trade tariffs would kick in.
So we expected January to be bad as the air has come out of that balloon.
This is an index of costs, not of stocks. So the chart should be looked at differently. No TA, just a literal view of prices for shipping freight. Those prices however, have imploded and the trend up (higher highs, higher lows) since the ‘inflation trade’ began in Q1 2016 is no more.
Meanwhile, commodities and global stocks bounce as anticipated. But if that is real, you would think BDI would soon re-firm the slack in its rope after fixing the tariff front-loading issue. Otherwise it’s a negative divergence.
Subscribe to NFTRH Premium (monthly at USD $33.50 or a 14% discounted yearly at USD $345.00) for an in-depth weekly market report, interim market updates and NFTRH+ chart and trade setup ideas.
You can also keep up to date with actionable public content at NFTRH.com by using the email form on the right sidebar and get even more by joining our free eLetter. Follow via Twitter @BiiwiiNFTRH, StockTwits or RSS.
