We outlined our Two Trades strategies on our Trade Methodology page, one of the two trades is to try and sell a commodity market when it is at record highs, as Lumber is now, as shown in the first chart. Obviously the trick is calling the top. At this point we are watching to see what will happen. The price action as of right now has the market holding at all new highs in a slight pullback on the minute chart, just just approximately $4 off the high of $540.
The second chart is the daily chart, which to us shows a potential impulsive Elliott Wave Count, although not without an overlapping wave or two.
Last but not least is a recent minute chart with one idea of how the market may move from here.
Our goal is always to enter a trade with a long-term, big win possibility using the daily chart – but we match that with a zoomed-in look at the minute chart in order to implement a tight stop loss. If we have a position we want to hold longer, we may use an option to gain value in the case of a move in the wrong direction.
This is not a suggestion for you to trade, it is simply the market as we see it. Good luck!
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