Today was a fitting conclusion to a shortened holiday trading week where we saw a lot of stocks and the indexes rise on below average volume on what amounts to no news. When viewing many charts I see a lot of negative divergences, rising bearish wedges, and no leadership in the form of breakouts. I would be very careful chasing a market on the long side right now.

The Toronto Stock Exchange is at a tricky crossroads and should provide some resolution in the coming days. It’s getting a bump from precious metal’s recent strength due to the many commodity stocks on the index and that could be enough to push it higher, so no changes in my small remaining position in EWC this week. Let’s just say at this point the Canadian markets look a little better than the US markets, but one big down day could change a lot with the TSX. When looking at the chart below I have a hard time getting excited about the long trade.

Another look at resistance on the TSX.

Note the RSI trendline, rising bearish wedge, and low volume.

2 Responses to “Resolution In TSX Is Coming Soon”

  1. Chris Says:

    Hey Jeff,

    Hope all is well with you and I’m glad to see you are still posting valuable insight. I spoke to you on the phone briefly at about this time last year and the markets were in a similar situation. Here’s my view:

    I just find it funny that the markets bounced off 1343 (annual pivot) on November opex at exactly 11:30 when european markets closed and we haven’t been back since (month before the strongest S&P500 month historically: December). An annual close below this key level would have me thinking the market could see further downside next year but a close above has me bullish. I started a few longs last week right before and on the bounce from 1343 and I don’t think we will test that area again this year. I believe we will test the highs of the year as performance chasers will propel the market to new highs by early January.

    Did you know, that if you bought the $spy anytime since 2010, your purchase would be higher or break even one year later almost 100% of the time. That’s signs of an impressive market.

    Source :http://jerrykhachoyan.com/the-most-astonishing-fact-about-the-stock-market-since-2010/

    Typing in “1343 S&P 500″ yeilds some interesting results. Funny, even the GW Bush’s inauguration day ended at 1343… That was in 2001. I really think this is an important key level and its important to observe how the markets trade based on it.

  2. jeff pierce Says:

    I try to be flexible about where the markets are going and they very well may go higher but right now there isn’t anything to support that. When I start to see leading stocks and my timing signal turns bullish I’ll be all over some long positions. Until then I’m willing to risk some of my short profits by shorting more index etf’s as I expect a down move next week. Thanks for checking in as this was a very interesting comment.

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