Lumber – Weekly Chart of Decline

Apr 29, 2007: 2:09 AM CST

Lumber (future) has experienced a rapid and sustained decline, as evidenced by its weekly chart.

lumber.jpg

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:  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:

lb08.png

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.

4 Comments

4 Responses to “Lumber – Weekly Chart of Decline”

  1. Anonymous Says:

    I’d love an update

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