Today’s drop to 15357.24 negates the triangle concept, at least the way it was presented yesterday. Just another 110 points or so and the whole idea can be ruled out completely. When a triangle does not work, it is often a series of 1-2’s which definitely does not bode well for the near future.
Here we have the TSX once again, big and small. We have absolutely no idea where the wave count presently sits over the past decades or more. The only thing that we do note, and this is with some clarity and confidence, is that we have managed to gain roughly 1/2 in just one year coming into the year 2017. We are basically double topping and the market is hesitating to advance further. This is an amazing performance considering that oil is still trading at less than 1/2 of its peak level just a few years ago and Canada’s position in relation to its neighbour to the South is clearly more precarious than it was pre Trump.
However the old formula that price= earnings/interest rate is still in play and at its extreme everything is priced at otherwise idiotic levels as interest rates are at, or are approaching zero. So one must remain alert to the possibility of yet another move up.
In the shorter term chart there appears to be a distinct possibility of a triangle forming. If so we are just about completing wave d of that triangle. For the purist EW among you, the readers, I point out that wave a can be counted either as a 3-wave structure or a 5-wave one. In the latter case that would negate the triangle! Assuming there is one anyway, the thrust that should start in June should reach roughly 16200 (700 points above the low of e, yet to come).
Such a spurt up to that level still leaves open what the upleg from the early 2016 level actually is, a wave B or a wave 5. We show both counts. Fundamentally we cannot imagine what could possible move this market higher again but that has been the case now for years and certainly has not been a good reliable thing to hang your hat on.
By the way, do not bet on any of this!
Below is a Bigcharts showing at least 2 valid interpretations other than the one above. Not shown is a series of 4-5s. Note also the triple top formation and that for the past 10 and even 17 years the returns have been little more than the dividends. ;
St. Patrick’ s day is as good a day as any to review the TSX. Many banker types downtown and elsewhere pretend to be Irish on this day simple to have a good excuse to have one too many. For those that watched Yellen’ s complete presentation and Q&A yesterday, one too many might not be enough. Each time there is another reason why the Fed will not do what it promised to do the previous meeting and collectively we simple cannot get it through our heads that the Fed is not at all interested in either employment or inflation. It’s raison d’etre always was, and always will be, to help out the banking system, period.
So now that things are so bad that we cannot move forward with “normalizing” the funds rate, oil and gold shoot up which used to be very bad but is now very good. The TSX shoots up in sympathy despite some lingering doubts with regard to our erstwhile favorite stock, VRX. The banks, at least TD and RY have or are about to make new highs so where are we??
Short-term we are completing a wedge, today, to be precise. There is no more room! We have done 2000 points in an equal number of months, about as good as it gets. At this very point overlap might occur depending on whether or not you use intra-day or closing prices, essentially this should not go any higher (there is an exception but we will not go into that). We are above the 50% and just below the 62% retracement levels, close to the wave 4 of previous degree level and both the RSI and MACD are ready to turn.
As an aside, for those that care, I must point out that the bear market in Canada started very close to the date predicted by Martin Armstrong, that is the year 2015.75 or October 1, 2015. Apart from his predictions, the story of his involvement with the Republic Bank of NY and the Safra family of Monaco, is fascinating and very real to me.
The TSX is not alone at being at a critical or interesting point. The Dow Industrials as well as the Transports , among many others including light crude oil and gold, are all approaching or at a major trend line;