Since last week-end’s market review, the TSX broke support at 13,550, traded down intraday and reversed itself with a new column of Xs all the way to 13,800 which happen to be the new resistance. It closed at 13,750. If it breaks 13,850, the bull market will still be alive and a lot of people will be happy! If however, it trades back down to 13,650, it will have generated a new column of Os and the next step will be a test of support at 13,500 which also happens to be right on the long term uptrend line. If that breaks to 13450, the bear will begin.
Market internals are useful in proofing the market’s action. Bullish percent since the last update continued to deteriorate after the breakdown of support at 60%. There are now 50% of the stocks which are in a P and F bullish pattern. This is a divergence which I can see in the universe of Canadian stocks that I follow. Many of them are now in a bear market even if the TSX composite is holding on to the bull.
But then again, the TSX is a market of large caps. Small cap Canadian stocks have deteriorated significantly in the past few weeks and that is not good for the Canadian market. Get your guns ready, because we are on the verge of pulling the trigger one way or the other.
The Word
Therealword@gmail.com
