(snip)"Lumber Prices Indicate Next Wave Down Underway
As I’ve been saying all along, nothing is solved until the DEBT SATURATION is resolved. Depressions move in 3 waves, A down, B up, C down. The psychology of each wave is different – wave A equals “oh no!” Wave B equals “we’re saved.” And wave C equals real change is forced to occur – no fooling around this time. You can clearly see how the psychology is different now than it was during the plunge in 2008. Instead of “stimulus” the buzz word is “austerity.”
No where else are the A,B,C waves more clear than in the price of lumber. First let’s look at a monthly chart of lumber going back to about 2001. You can see a sharp rise into a $460 peak, then a plummet that led the stock market by nearly 3 years all the way down to $140 – a stunning 70% collapse! That would be wave A. Note on this chart that the current month’s price of $182.80 is not yet reflected:
Then we bounced smartly all the way back to a recent April peak of $325, that would be wave B.
Since April, lumber prices have collapsed 44%, dipping below $180 and today is sitting at $182.80 – here are a couple of daily chart presentations
Sure looks and feels like wave C."(snip)
from
To put the author's comments in perspective, our present position at the beginning of wave C would put our summer of 2010 in an equivalent position of the summer of 1930 !!!
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