The lumber price crash is normal, and is an example that “investing” in lumber does not work! Every trend ends and lumber ended its bullish trend in May 2018 ($660). Watching the lumber prices crash is a pretty clear signal that the real estate market is also crashing. I’m looking for a potential zigzag in a Primary degree which could take years to completely play out. Even then lumber prices could be subdued for decades. Don’t think impulse but think diagonal, whenever we get connecting zigzags.
The majority of the world uses fundamental analysis, but I bet not a single person knows what “fundamentals” created the wild spike to the upside and then the impending crash. In the end, fundamentals are thrown to the wind as traders just want to ride the lumber bull in fear of missing out.
I will not post every little turning as I only need to confirm Minor degree or higher moves. There is no real price bottom I can give, but $220 would not surprise me when we get to the previous bull market correction bottoms.
Every Tuesday I get the Market Vane report which always tells me how many “bulls” are present when surveyed. The MV report has been around since the 1960’s and has been respected ever since.
I ordered the subscription many times in the past, and have hard copy files of many that I keep in a binder. It was the 98% bulls that were present at the peak that instantly prompted a crash warning as 98% bulls present leaves nobody left to still come in. At 98% the lumber prices were doomed. This week my lowest reading was already 36% which is a huge drop. Mind you, it may take well below 16% bulls before a solid base can be established.
What I see here is a diagonal set of 5 waves in Intermediate degree connected by zigzags. All commodities are connected in the same way, and require a completely different idealized pattern to go by. There is an extremely good chance that gold has already seen a bottom, then if this is true shouldn’t lumber prices soar as well? Crashing lumber prices also tell us where the housing market is going as demand for new homes is failing.
If the big bearish cycle in lumber is in effect then there should be no new record highs. We might get a wave 2 rally but if it turns choppy then more downside will come. It will be a long-term bearish trend that will change housing forever. 10,000 boomers are retiring every day for the next 19 years, so do you think that this is positive for the prices of SFD to keep going up? Maybe on Mars, but not on earth.
The last time I was calling for a top in lumber prices it was starting to form that, now obvious spike, that we still can see. These spikes show up as thin hairs in candlestick, and I decided pretty early on, that I didn’t want to count hairs for the rest of my life. Imagine me trying to make a living counting hairs, yet the entire world uses candlestick constantly. The entire world can’t make that single click to dump candlestick when producing positions in commodities. I will not post intraday charts on lumber, as I don’t have the time, and will not fill out every little wiggle that we might come across to entertain my readers.
It is very important to track lumber as I see it as being the canary in a coal mine, to what is going to happen across the entire real-estate world. I believe that the Cycle degree wave 3 position is good, and that we could be at a position where lumber prices could be subdued for many decades to come. It has to do with the world fertility rate implosion, that is going to have huge implications on the prices of all commodities including precious metals of all types. They are all sitting on Death Crosses, and we can see that lumber has rolled over and will slice that 200-day MA creating the Death Cross at the same time. This is a Cycle degree crash and we could be heading for a bear market that will kill many jobs, that may never come back!
Been there done that folks, as we are facing the same situation that happen when I was working in the forest industry, when gold crashed in 1980. My buddy still works in the same sawmill when I joined them as my plant was toast a long time ago by then. We hope to have a bigger meeting with more of his co-workers sometime, but after they meet me, they may never talk to me again. Gold bugs tend to get pretty agitated when you tell them that gold is going to crash below $800. I like watching them squirm when I say the $700-$800 gold is real support, not that unstable $1050 price level, that the entire gold investing community thinks is a base. The gold boom is over, and it was finished in 2011 as that was a 30 year gold mania top, that will not happen again until 2041 or Supercycle degree peaks.
At this stage of the game it looks like so many asset classes are sitting on Death Cross, that I have to shake my head in disbelieve thinking that this can’t happen.
I have been showing another friend who has lost millions and made millions, and I showed him my gold scenario, and so far he has directly told me that he agrees with the impending gold crash. This person is the only person that has seen my charts in great detail in the last decade as we are both traders at heart. Some of my old bosses turned to futures trading once they retired as well.