Signals

Lumber as a bullish sign

Similar to how gold is a bearish sign for the economy, lumber is a bullish sign of the economy Lumber can be thought of as a proxy for domestic consumer strength (due to housing)

Generally when lumber is weak compared to gold, small caps outperform large caps. Small caps are more sensitive to changes in the domestic economy; while large caps are more multinational.

  • The logic may follow that when the us economy is doing well, you’d want to own more small caps.

Utilities

Utilities are the most bond-like sector of the stock market; they move based on interest rates/demand for money