The DBB Base Metals ETF plunged 3.24% today on double its average volume. This thing tracks the boring metals: copper, aluminum, and zinc. If these metals fall, you could conclude that the global economy might be slowing.
Click on this chart so that you can see it:
Notice today’s high-volume “gap down and die” day as DBB plunged below my lower trendline breaking out of its triangle pattern.
This chart reminds me of the Baltic Dry Index, which may also be rolling over. It looks as if these two indicators took their initial dives around January when it became clear that the US economy was slowing down, but then mysteriously rallied back. I’m thinking that the first move was the real move, and that the bounce back was the fake move caused by hot money fleeing stocks for a new home in commodities.
And now that there is talk of stricter regulation of futures markets, the hot-money tide is going out, leaving us with evidence of a weakening global economy once again.
One day, Jim Cramer will look back on his statement that the US economy no longer matters, and he will have to “wear the Post-It” – the biggest Super-Sticky Post-It that 3M makes. Talk about dumb!