Lumber was an early warning sign for some of the recent weakness in the homebuilders and home construction stocks.
WY is a lumber play, and also lumped in with the REITs. So, as you might imagine, the stock has been whacked as well.
On the updated daily chart, below, I am looking at this as a short idea on any further weakness to recent lows as it breaks the bear flag highlighted, under the declining 50-day moving averages.
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How is lumber correlated with the DOW? Any connection through house building? It seems this chart gives divergence like other charts I’ve seen.
most people never seem to get it about lumber.”how is lumber correlated with the dow”? ask your self why the most industrious material has anything to do with the dow.for one thing lumber is industry,or whats left of it. nations and civilizations have perished for the lack of lumber. lumber is a “signal” that has been used throughout the world, for indications way before,mac,d ,rsi, bb,and every other technical indicators that are available today in order to do any analysis. i can tell just by looking at lumbers’ price movement and know just what way the trading day will/or wont end.it leads by a few days at the most.and it’s never wrong.having tracked lumber seriously for the last five years has shown it has been right at least8 times out of 10,all the time.when you get crappy numbers,and jive numbers from the talking/lying heads and nar stats.lumber WILL always tell who the liars are. lumber is over priced right now,and doesnt reflect housing what so ever in real terms. then again 90% of folks don’t realize that lumber just isn’t housing.it’s a full picture of industry,in a nutshell.it’s all the peripheral uses of lumber,that folks always forget about, and not just housing.having done very well with lumber from 09, till the flash crash was one of my best moves. lumber is a long term play in my book.one can use it’s fluctuation signals for day trading/swing trading other things because it’s usually a good indicator of whats to come in the near term.dont know too many that day trade lumber that much,unless your speculating in commodities with big coin. the dax is another indicator.for the last 6 years the american markets go exactly the way dax does,try it for a couple weeks,it’s pretty surprising.the only time it doesn’t is when the game changes because of central planning by db.and the fed. i have observed these very carefully for quite some time and they have held up as indicators like no one’s business,at least for me they have,and they have been more right than i’ll ever be.wy has been a very good stock since they filed to become a reit before 07.
Thanks a lot. I will definately take a serious look. Used to think Dr Copper ruled the word.
BtW, I live in Europe, so from over there things may not always be so straight forward. thanks for your reply.
Yesterday the future on lumber was down by over 2%. Copper was flat. Now the Dow30 is down. I’m sold.
Nice!