Review Of Lumber: Bears Control The Trend
Eric De Groot | Mar 05, 2015 08:03AM ET
The professional investors must profit by anticipating future trends and events rather than chasing old news. This is done by following the invisible hand or message of the market. That message, the simultaneous study of the the cycle of accumulation and distribution (trend), the distribution, movement, and participation of leverage (leverage), time/cycles, and human behavior void of opinions is defined below:
Trend (Bearish)
A falling trend has supported negative trend oscillators since the first week of January (chart 1). This defines an down impulse until reversed by a bulls crossover (XO). The bears control the trend as long as the trend oscillators remain negative.
Lumber : Chart 1
Leverage (Bull Phase/Bearish)
The flow of leverage (red arrow) has defined bull phase since late January (chart 2). This phase, though generally weak - generally sideways rather than downtrend, supports the expectation of rising prices until reversed.
Chart 2
Lumber's leverage oscillators, holding above zero since January, support a falling price trend (chart 3). The up impulse defines the expectation of falling prices until reversed by bullish crossover.
Chart 3
Time/Cycle (Seasonal High)
The 5-year seasonal cycle defines strength until the second week of March (chart 4). This seasonal transition could organize the sellers and frustrate the bulls.
Chart 4
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