What is lumber telling us?

What is lumber telling us about the near-term strength of the economic recovery?

Lumber Futures Continuous Contract and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:


Many uphold the view that housing is the key to economic recovery insomuch that affords consumers to ability to borrow and consume – the engine of US growth. Further declines in lumber prices implies a weak housing market. A weak housing market implies a faltering economy.

Infinite QE will not be withdrawn as long as the economy/housing continues to weaken. Infinite QE will drive the dollar lower. As goes the dollar, so goes gold in the inverse.

I will be watching lumber closely during the bearish setup.