Does anyone have any comments on the seasonality of lumber futures? It seems that with housing down the toilet, it would be a good time to short lumber. Why or why not? B
Lumber has a decently, well-defined, "seasonal" habit of rallying from November to February. We'll see if history can repeat itself this time around.
nazzdack is right. Actually seasonal stratagy is to buy jan lumber on 10/27 and exit on 11/29. Works 93% of time. Lumber is very seasonal and fairly reliable but not sure I would do anything with it right now. Cash trade has been horrible for a long time now and we have lots of inventory on hand. We have fallen so far ive got to think there is a bottom coming up pretty quick and with the seasonal trade going on. but wait until it is confirmed because lumber can eat your lunch fairly quickly if you are wrong.
Uh friend, unless things have changed drastically lumber is one of the most illiquid markets hands done. Try butter and milk why don't you. There are probably, correct me if I am wrong someone, 8 guys trading in a pit, and they are going to ream you a new one. #1 rule of trading. Trade liquid markets unless you and your buddies are locals and get to do the reaming.
Seasonality can bring about mixed results. Seasonal energy trades as of late is a real good example. I think that traders should also analyze the market fundamentals at the present time in any particular product. LB had a great seasonality setup in 2002-2003 due to the housing boom. It looks to be stuck in a sustained downtrend until at least 200 or so imo. Copper could be present a better short setup right now from a housing bust scenario...
NAH -- 14kt Gold, Nickel-Silver, Stainless Steel, Plastic, Elephant Ivory, Whale Bone ... --- Mike Collier Oak Harbor, WA