Baltic Dry Index (BDI), a shipping and trade index that measures changes in the cost to transport raw materials, has dropped 40% within a month from 2337 to 1395. The last time BDI dropped sharply within a short period was from mid-October 2011 to early February 2012. It dropped 70% within 3.5 months as shown by the chart below. In fact, Dow gained 10% within the same period when BDI dropped 70% and Dow continued to climb when BDI moved side way at the base.
Since the introduction of the QE programs by central bankers, Dow's movement has been dictated to a greater extend by the liquidity in the market.
Dow
Dow dropped 180 points (-1.1%) on Monday. This sharp drop confirmed the previous high as mini-wave 3 as shown below.
If sub-wave iii has only 5 mini-waves, Dow will have one more run-up, the mini-wave 5, before the higher degree sub-wave iv correction starts.
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