Peak Lumber?

After yesterday's post I ran across the following article: Peak Wood

An interesting idea considering I grew up during the "Trees - America's Renewable Resource" PR Campaign.

Lumber

Along with the rest of the Commodities markets, Lumber has gotten hammered by the Dollars recent rally. Lumber is down some 30% off its recent highs. Possible support is evident between $220 and $225.Until New Home Starts make some sort of turnaround its hard to see Lumber screaming higher. While Builders have made great strides in reducing their Inventories (w. help from their tight-fisted lenders).....

...there is going to need to be a significant reduction in Used Homes available for Sale. Unfortunately, Used Home Inventories took a pretty steep seasonal run higher.

Lumber Update

After the breakdown, looks like a bascktest of 178 is order. Stops at 180.25. 160 should be the bottom for lumber.

Lumber

Critical juncture for Lumber. After two failed attempt to break its longer term downtrend, Lumber is back knocking on the uptrend of its fledgling 2009 rally.

Oops! Not looking good for lumber here. Taking a closer look it appears 178 will be tough resistance to break thru. A short would put a stop in at 182 while looking for a target of 150 setting up a longer term double bottom. Appears lumber traders think new home starts won't pick up until Spring 2010. They're probably correct on that count.