Lumber – Weekly Chart of Decline
Lumber (future) has experienced a rapid and sustained decline, as evidenced by its weekly chart.
We are seeing weekly momentum buy divergences that indicate a slowing of the selling pressure, but the trend remains in tact until disconfirmed by a higher high and a higher low.
Until then, odds favor successful trades on the short side, with tight stops because of the developing divergences.
UPDATE:Â February 9th, 2008
A reader requested an update to this chart, which terminated April 29, 2007.
My call was on, in that ‘odds favored the short side’, as lumber made new recent lows at $217.
Here is the weekly chart:
By the way, the divergences I referenced did resolve with a quick ‘short squeeze’ almost after I posted the article. The ‘short squeeze’ is represented by the green bars which soon turned back to red as the trend resumed.
I’d love an update
Woo this is a nice blog, i would love to read more.
Thanks
harsel gibs
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