Trend following Commodity Trade of 6.20.09

As most commodity trading advisors know, Buy Strength and Sell Weakness. Bearing this in mind with our trend following methodology, the commodity trade of the week seems to be lumber. Lumber has had a tremendous sell off. To put this commodity trade in perspective in 1993 Lumber was selling for $929.10 hitting a low of $165.50. Would seem one would not want to be a supplier of lumber. Actually, probably many have gotten out of the business. As a commodity trading advisor and more so a trend follower I have no explanation why lumber has moved from $165.5 to our commodity trade of the week price of $233.00. When one trend follows the only thing that matters is price action and more so…putting on a low risk trade. Last week since Lumber was one of the strongest markets compared to 70+ markets I trade I took a low risk bet. I risked less than 1% of my account and as always when trend following…said to myself…lets see what happens.
6/10/09 F1 1 SEP 09 CME REV LUMBR 219.10 US 1,529.00

1 * * CLOSE PRICE 233.00 ** 1,529.00 *

AVG LONG 219.100

Well so far the trade is working …but that really does not mean anything in the scope of commodity trading and trend following. I have a protective stop…and will start trailing very soon… Lumber which is the commodity trade of the week is an example of buying a highly ranked market…putting my stop in place…and then sitting back…and seeing what will happen.