Everyone’s talking about what’s next for the U.S. economy. Lumber’s recent price trend is flashing a warning signal of a turn in the tide ahead. Here’s an excerpt from the July 19, 2024 Elliott Wave Theorist:
Price declines are well underway in the commercial-property sector, and they are beginning to appear in the housing sector. The April 12 issue of The Elliott Wave Theorist predicted further fall in lumber prices to parallel a slowdown in construction. [The chart] shows the downtrend since then.
Lumber prices are an early indicator of trends in home prices. They declined for two years prior to the high for home prices in 2006, which was one year prior to the stock market’s high in 2007, which led to the Great Recession. Lumber prices have now fallen for more than three years since the all-time high registered in April 2021. Based on the timing of peaks in 2005-2007, it is time for stocks and the economy to follow suit and turn negative.
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