It would be nice to see a retrace towards 9400 allowing stops at 9375. Not clear whether that opportunity presents itself. Target is at 9535. If the target is hit, the possibility of new highs increases.
After the breakdown, looks like a bascktest of 178 is order. Stops at 180.25. 160 should be the bottom for lumber.
DCon't count China out quite yet. Shanghai is testing important levels with a confluence of support at the moving averages, downtrend backtest and a short term trendline. A conservative buy level is at 2700. The stop would be 2600. A test of the recent highs would be a minimum target.
It's make or break time for the 5 Year Note. It traded below its 20ma and 50ma this week. It's going to need to get above 2.4% in a hurry to keep wave 4 favorable. A further backtest to the breakout will unfavorably weaken wave 5's target.
Gold is making the move. The Indicators are showing more room for this move. We should see new highs in the coming weeks. After the breakout, stops should be moved to just below the breakout.
Backtesting the breakout. Indicators are getting overbought. A sustained breakout might be more sustainable if the backtest takes it down to 1900. Unfortunately that's quite a ways from today's close.
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.
The seasonal inventory build is underway. It's going to be hard to get much pricing traction with inventory still too high. Any strength is going to be met by higher listings sapping pricing power.
After stablizing, used home sales are actually picking up. Desperate sellers and eager investors/1st time buyers are providing some much needed liquidity to the marketplace. Appears sales volumes won't much below 3,500,000. This is great news for transaction based market players who downsized during the downturn. Escrow, title insurers, agents and low end builders should be looking at strategies to increase their market share.
Prices aren't dropping as fast as they were. Investors and 1st time buyers are providing a much needed floor on low end prices. Investors may have deep pockets and continue to support the market. 1st time buyer pent up demand will wane as the tax credit expires. Builders and their lenders desparately need prices to stop dropping in order to curb their losses. Low end builders may be nearing this point. High end builders will continue to bleed. Take your losses this year in order to be competitive in the marketplace.
