Is Global Trade Heating Up? Or Is It Just Leveling Out?

One of the best indicators to see how the global economy is doing is to just look at the CRB index. While we don’t expect it to be hitting new highs anytime soon, it would be nice to see it moving up at least a little. Instead as you can see in the chart below it has only managed to find some type of bottom. If it’s “The Bottom” or just “A Bottom” is besides the point for now. It is enough to see that it is not trending up.

CRB Index

crb

Another good indicator to look at to gauge the strength of the global economy is that of the Baltic Dry Index. Over the last couple of weeks we have seen many blogs and other market commentators mention that the index has been climbing. Of course what they fail to mention is that if you look at the longer term chart of the index, it is still down significantly and it makes the recent rally look insignificant.

Baltic Dry Index-Short Term

bdi

Baltic Dry Index-Long Term

bdi2

Needless to say we think that many commentators are getting ahead of themselves in saying that the economy has bottomed. In fact the vast majority of the economic indicators that we follow are still pointing straight down, without any “green shoots” characteristics. Until we can get some historically reliable indicators pointing to a bottom and/or a rebound we will be cautious as capital preservation is our first priority.

Happy Trading,

Dave@TheMacroTrader.com

P.S. If you are getting value out of our posts, you can do us a favor by linking to us with your site or blog and mentioning The Macro Trader to any of your friends that trade.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *