Wednesday, May 29, 2013

Lumber's swan dive

This is an update on the blog post of 5/14.

Home builders took it on the chin today along with many other sectors but I had to post this chart of Lumber.  It's crashing!

(click on chart for larger image)
 
Evidently, waning Chinese demand and rising exports out of Canada are the two catalysts for this weakness?  We'll see.
 
Watch ITB and XHB for continued weakness.
 
Key support levels:
 
XHB - a gap at 30.78 - 30.55 and then the 50 Day SMA at 30.34
 
ITB - has already filled its gap set on 5/3 and appears to have broken very short term support already.  I'll be looking for a bounce at the 38.2% Fibonacci retracement level (24.46).