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Lumber has traded within a falling channel for the past 20-years. When lumber has hit the bottom of the channel, stocks have followed to the tune of 100% rallies twice.
The key to this pattern is when Lumber is at the top of the channel and turns down, it seems to pull the economy, stock market and economy lower with it.
The upper left chart reflects Lumber recently was at the top of the falling channel and the upper right chart reflects a breakdown in Lumber. Lumber as a leading indicator is usually a good bit ahead of the economy and stock market.
Is Lumber sending a macro message about the economy again that investors should respect or will it be different time?