The Canadian Technician

Gold Stocks Surge! Want A List Of Strong Ones?

Gold stocks bubbled Tuesday and there were some great trend lines broken. So let's work through a collection of the Gold stocks. Here is the XGD.TO Miners ETF in Canada. The SCTR is going ballastic and is still a little below my trigger line of 75. However, this is for the gold stocks average. On the price panel, the trend line finally broke Tuesday and the MACD is moving above zero. The Relative Strength in purple is still weak. We would like to see this move to three month highs. At this point it is just moving to one month highs. Patience should kick in here, but the other improvements suggest to pay attention now. 

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$TSX End Of Quarter Review

The $TSX put in another lower low and a lower high this week and closed down relative to last week. The sideways trading range we see in the Canadian market is reminiscent of the period from July to October where the market traded around a level. The level currently shown as a red line is about 15500. On the price panel, this was the first week on the one year chart below that the $TSX never touched or got above the 10 Week MA (blue line). The RSI and MACD are still in a bullish posture on this shorter term chart although the MACD has crossed below its signal line. 

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The $TSX Through Different Timelines - Sell Signal

The $TSX has not made a new high for three weeks and it looks suspiciously like this week is creating an important support level that needs to hold.

Below is a one hour chart, which I don't look at often. The RSI is stuck below 60 and the Relative Strength chart shown in purple illustrates the $TSX continuing to underperform the $SPX. The price rolled down significantly and has failed to get any higher than 15645. Monday March 1 was a big rally day in the USA with the Dow up over 300 on a push to new highs. The Canadian market has rallied back up to test the March 1 high, but continually rolls over. So far, the highs of March 10th and Monday, March 13 have stalled at lower levels. This chart looks weak. I have drawn a horizontal support line around 15425. The more this level gets tested, the more likely it is to fail.

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The Canadian Market Loses Some Breadth - 2017-03-07 - Today In The Market Tip

While the market awaits the Federal Reserves decision to raise interest rates next week, lots of things are happening under the surface. The bullish moves in the marketplace are now happening in the defensive sectors and we are seeing more and more information creating a warning for the market cycle.

Here is a picture of the Bullish Percent Index (BPI) for the $TSX ($BPTSE). The point I would like to make on this chart is where the BPI crosses the 40 WMA at a very high level, the 4 previous corrections have been at least 5%. In a roaring bull market, that is not so bad but it is nice to be aware of the potential setup. I have drawn the red horizontal line at the current BPI level and the blue lines show the timing on the $TSX when the market crossed down below the 40 WMA from these lofty levels. The other thing to notice is the market does not hold this level of Bullish consensus. You can see the $BPTSE has not spent a whole year above the 68 level since we started recording the data. The 2013-2014 period was close but that had QE Infinity in play at the time.

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