What's Lumber Telling Us?

In my April 18th Signs of life in zombie housing market I suggested the following:

In this business anything is possibly over the short-term. However, almost all spin/MOPE fades without the support of money.

Money continues to fade or bet against a housing market. As the price of lumber has risen, commercial traders have aggressively shorted it across multiple time frames. Such actions could be interpreted as supply/demand related activities, but it's persistence over time weakens that interpretation.

Since then, continuous lumber contract has fallen from roughly 320 since to 235. What brings my attention back to lumber are the inflows from commercial traders during the recent decline. The fading of the decline by "connected" money should not be ignored. While the inflows have yet to produce a long-term bullish setup, they have triggered a short-term one.

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


COT Money Flow Table - Lumber: