Some interesting factors are currently affecting commodity prices. Supply chain bottlenecks, unpredictable demand from economies reopening, geo-political tensions, climate change policies are just a few examples.
I find it helpful to review the state of the commodities market periodically. In this article, we will examine Lumber, Cash Crops, and Iron Ore.
🏛LUMBER making a massive correction
From the spectacular bubble like covid rally
And the price will soon be retesting an important weekly support
From where I am expecting a pullback upwards
With the chance of retesting the level above
☑️Buy CALL options 600$ strike
☑️Expiration end of the...
Lumber prices sliced below the 200-week Simple Moving Average (SMA), putting the psychologically imposing 500 level back in focus. A drop below 500 may open the door for more losses. Alternatively, bulls will look to defend the level if recovery hopes are to remain alive.
🏛LUMBER must have been one of the best performing assets since the pandemic begun
With the price increasing by whopping 581% from the covid crash lows
Such a massive surge was determined by the home building and renovations fad
With the disrupted supply chains adding fuel to the fire
Now, however, the pandemic hosing...
Some may not be aware of the importance of lumber price movements.
Basically lumber rocketed like nobody's business, then crashed (>50% correction) pretty quickly. This post is not an analysis of why lumber prices rose so crazily. Viewers will need to do some background reading.
The collapse was the worst seen since 1978 . That's something to chew on. In...
Cathy Wood from Ark innovation brought my attention to the price of lumber, which had a run in 2020 and now it seems has topped, just like bitcoin. I checked the relation between lumber and BTC and they are very correlated. They both had bullish price rise in 2013, 2017 and 2020. When we compare they price patterns, lumber could forecast the future price action of...
Last week, the commodities sector experienced more than a speed bump after an extended period of price appreciation. As July soybeans roll to the next active month and the new crop November contract in the futures market, the price became a falling knife before recovering on Friday, June 18.
They were not the only commodities
A Fed hint made its...
On a daily chart, once again tracking the move of the Lumber Futures. While on the negative side for some time already in matter of days, it has turn the move from its high peak into a lower or downtrend. Its position on the down side for few days may suggest a continuous move.
Idea for Housing/REITs (VNQ):
- The Housing Market will crash. I am short REITs.
- Lumber rose 400% in a year during a global crisis and then dropped 50% in a month... This is not a correction, but a bubble pop.
- China reining in commodity prices. They announce that they will soon release state stockpiles of...
Lumber prices are looking lower after slicing through the 200-day Simple Moving Average (SMA). Former areas of resistance turned support may offer relief but bears appear to be in full control. A drop to the 600 level may be on the cards.
Updated View on Lumber (15 June 2021)
Lumber was cracy run (all time high) due to shortage of supply in recent months and it has since somehow relived.
The same move also trapped a lot of late chaser and now most of them must have wiped out.
I am expecting $900~$970 region will act as a good support region. So, now it is kinda late to sell, too early to buy in...
Pattern: Channel Up on 1D.
Signal: Sell as the price got rejected on the Higher Highs trend-line of the Channel Up.
Target: The 1D MA100 (green trend-line) on the short-term and the 1D MA200 (orange trend-line) on the medium-term.
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