Housing Stocks in 2014?

McClellan has a great chart in his weekly column examining lumber as a leading indicator for housing stocks:

“Housing industry stocks as a group appear poised to start a strong pop up into early 2014.  That’s the message from looking at the chart plot of lumber prices.  It was back in 2008 that I discovered that lumber prices give a good model one year ahead of time for what housing stocks should do.  I figured that there ought to be some relationship between lumber and housing, and when I put the two series together on a chart it was obvious there was some relationship as expected.  But it did not look quite right.  Shifting lumber prices forward on the chart was the key to unlocking the real relationship.  The same dance steps that appear in lumber’s price movements tend to be traced out about a year later in the prices of housing sector stocks. ”

Quick chart then download:



Link to Article

Housing Stocks to Pop in 2014