History doesn’t repeat itself but it often rhymes – Mark Twain
The smartest minds on Wall Street use charting analytics to quickly identify and then track trends in multiple data sets. Why? Because it works. Even the most intelligent investor or skilled trader identifies patterns in numbers when they are charted far faster than when those numbers are simply displayed in columns and rows. Graphically depicting data becomes more important when you are trying to compare two or more data sets and understand the relationship between them over time. When viewing a chart of a couple of data sets that are related, you begin to understand the reason of the marketplace. If you can add a series of technical indicators to the graph, you begin to understand the rhyme and the reason of the marketplace.
SONAR allows you to quickly view graphical series of data, many of which weren’t previously available to professionals trading the marketplace. More importantly, it allows you to view those data series compared to other data series (some proprietary, others not) and then apply the type of sophisticated technical indicators to the data series that are normally reserved for Wall Street. Patterns in the data don’t just sit there quietly as numbers; they literally jump off the screen at you. What are a few of those ‘jumping off the screen’ at us right now?
One of the indicators that is jumping off the screen right now is the Headhaul Index.
Certain areas are showing strength that is to be expected (LAX and ONT) while others are a bit surprising (MDT, MEM, and BMI).
After accelerating in June and then slowing down for the summer doldrums in July and August, LAX which currently represents approximately 2.35% of the loads, has been reaccelerating as strong inbound container flow (from retailers stocking up for the holiday season) is driving the headhaul index higher.
ONT, which currently represents approximately 3.94% of the loads, is displaying a similar pattern to LAX for reasons that make sense to most logistics professionals, except that it has just gotten strong and remained strong since the spring.
In MDT (3.51% of the load market) the normal seasonal pattern, not dissimilar from the LAX market, appears to be occurring with two basic differences. One, this market has accelerated in the last week in part to sourcing of goods to assist in the hurricane recovery efforts. Two, although not readily apparent from the reported intermodal train speeds, we are hearing that shippers throughout the eastern seaboard are struggling with poor intermodal service, and are as a result turning to over the road truck for more timely / reliable service. As we find something more than anecdotal, we will provide it immediately to SONAR and Freightwaves subscribers.
We believe a restocking of the hurricane hit region and intermodal service woes are also helping drive the headhaul index higher in MEM (1.85% of the load market) and BMI (1.38% of the load market) more than other market factors normally would.
Stay tuned…