Between Thanksgiving and a Prosperous New Year?

by Ian Bland, Freight Derivatives Manager, Clarkson Wolff, London

As we look back at 1996 and consider the chances for 1997, there are three easily available tools we can use to quantify and qualify the history and debate in respect of the larger dry cargo vessels. First is the Baltic Exchange’s Freight Index (BFI) which measures the health of the Panamax and Capesize market. This began life pegged at 1000 in 1985. It fell to an all time low of about 550 in 1986, and reached a peak in May 1995 of 2352. Its progress can be mapped and analysed; it has all the internal pressures, shapes, support/resistance levels and volatilities that a technical chartist needs to reach a state of academic nirvana.

Now is not the time or place to offer the light relief of a detailed exposition of theories of fermat or fibonacci – all that needs to be said is that the market had to collapse. There was no room on the up side; it was overcooked and all the signs were there loud and clear. Since May 1995, the BFI has dutifully shed its value – first to 1500 in January 1996, then to 1000 in September, courtesy of two retracements on the way. Since September, the index has neatly climbed back up to 1500 again, completing an almost obligatory reactive process.

This is only an excerpt of Between Thanksgiving and a Prosperous New Year?

Content is restricted to subscribers. To continue reading please Log-In or view our subscription options.