Lumber and natural gas in focus
Cathie Wood's favorite recent commodity chart is lumber. Her and other commodity bears have been overlaying it with other commodities in a hackneyed attempt to show that every spike will result in a bust.
In general, chart overlays are bad practice if they're not highly correlated assets over the long term. But they're a favorite of those looking for attention.
The thing is, while lumber has been used as a market to foreshadow all others (don't get me started on iron ore, which is about Chinese policy) the latest trend in the price of trees is higher. Lumber futures are back up to $750 from an August low of $482.
The futures market in lumber is extraordinarily thin but cash prices have also made a move to the upside, with the latest pricing around $580 and rising 4.5% since last Friday. Random Lengths pointed to to upward momentum across grades as consumption outpaced production though noted that buyers remained cautious. But if you factor in yesterday's call from Goldman Sachs for a multi-year boom in US housing and there is plenty to like.
A commodity at a different stage of a boom is European natural gas. To me and everyone else, the price action on October 6 looked like a blowoff top. However TTF prices made a low the following day but haven't declined or hit a new low since. They're up 10% today on forecasts for colder weather and lighter wind.
