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

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

Baltic Dry Index-Long Term

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.

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Over on the Calculated Risk blog we saw today how they were talking about the rebound in port data using Los Angeles port data. Since we track the LA and Long Beach ports (they both publish data on their websites) we decided that we would take a closer look at this supposed 28.9% rise in total loaded containers.

Looking at the combined data we can see that not only have we had a strong rebound as of late but that it appears to have happened several times over the past few years.

Combined Port Data

After noticing that each year around this time ports have a drastic increase in total volume we broke the data down by month.  In the chart below you can see the March data from 1995 to now.

March Data

As evidenced by this chart it is obvious that March typically is a strong month.  In fact from 1995 to now it is on average the strongest month of the year.  The average gain from February to March is 10.69%.  The next best month on average is April with an average gain of 5.96%.

What this data shows is that while we did have a rebound of sort it appears to be a seasonal pattern that shows up almost every single year.  That being said the data is up and the economy could have turned and things could have changed……but we doubt it.

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.

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