Lumber Crash Update!

 

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.

 

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