Baltic Dry Index and Paragon Shipping (PRGN)

Chart analysis of Baltic Dry Index and one of dry bulk shippers (PRGN)

Baltic Dry Index

PRGN

BDI is facing resistance at both 50% retracement and neck line at around 3000.  Watch closely to what BDI will do at that point, if it breaks above the resistance, then double dip recession won't be real and S&P 500 will not tank.  If it breakdown by resistance, and resume falling, then prepare for S&P 500 crash.

Baltic Dry Index Outlook: Shipping Shift

Baltic Dry Index (BDI) dropped heavily from last year's high of over 11000+ in June 2008 to 1000 level in Nov 2008 and 1500 in March 2009. After that, it has been in a volatile uptrend mainly driven by China's demand. Today CNBC aired an interview with JP Morgan and Barclay analysts on Baltic Dry Index. They were pessimistic about BDI's outlook in 2010, mainly because massive number of new ships will come online in the next couple of months which will disrupt the BDI uptrend. JP Morgan predicted that BDI will stay between 2100 and 3200 range on average in 2010. This is not good news for shipping stocks.