Loading ...Interesting article on gold and Lumber of all things.
Here is a nice little discussion on gold and its performance comparison to lumber.
with Daniels Cambone and guest Charlie Bilello, Research Director, Pension Partners.
I think the guy has a point. The comparison isn’t trivial. This chart is miles different from a gold:oil or gold:CRB chart!
Anyway, I thought I would look at the gold:lumber ratio on stockcharts and it appeared to be to be quite similar to the gold vs UDN (inverse dollar index) chart that I posted yesterday.
http://stockcharts.com/h-sc/ui?s=$gold:udn&p=M&yr=10&mn=0&dy=0&id=p84715185119&a=422997387&listNum=1
Both had bull markets form 2007-2011, both had an aggressive new high in early 2009 after the Crash of 08, both ropped in 2011, both had a crash into 2013 (but gold:lumber indicated the gold bear market FIRST!), both made a major low right at the end of 2013 (along with some elite gold mining stocks funnily enough) and both have been in a steady uptrend since until January 2016:
very interesting and makes a lot of sense actually
In 2010 December Bob Hoye declared that commodities have topped based on their research and a prop’ indicator Momentum Forecast indicator. It peaked at 31. That marked the top for commodities.
do you know what Bob Hoye is thinking now?
I haven’t heard one of his podcasts lately. I suspect he might be thinking that he wants to get out for a spin in his sporty little Alfa Romeo.
explain the significance please
On the video blurb, it says:
“According to Bilello, lumber reflects the state of the country’s consumer-driven economy, which is so focused on housing.”
He also correlates the changes in the gold:lumber ratio to stock market volatility adn economic weakness/strength.
I am not fully convinced but the guy may have a point in his interview.
Anyway, it was just food for thought.
Here are a couple more links:
http://www.barrons.com/articles/gold-lumber-and-their-impact-on-stocks-1429566576
http://charliebilello.tumblr.com/post/116917000659/lumber-gold-and-volatility-in-equities
I just went off myself to look at a gold:lumber chart and thought, hey this is quite similar to gold versus the UDN (or the inverse of the dollar, i.e. the Euro, Yen, Pound basket).
I am not convinced that it is that helpful actually, EXCEPT THAT the fall in gold:lumber in 2011-2012 was a good signal for a bear market in gold long before the breakdown in April 2013 and that did interest me!
interesting, especially gold:udn as its got a bullish structure to it