Trouble Up North? Shorting the TSX
The TSX, Toronto Stock Exchange, is Canada's senior stock market.
Here's a detailed look at its long-term chart:
The black lines show a downtrend of resistance immediately above its current levels, and an uptrend stretching back to early this year probably already broken.
Of greatest interest is the momentum at the bottom. The red arrows call attention to what happened the last three times when there was a cross in the MACD (Moving Average Convergence Divergence) similar to the one that's happening now (red circle at lower right).
Such indicators are never fool-proof, of course, as evidenced by the green circle at lower left showing a time there was a breakdown in the MACD but the market didn't drop.
With global stock markets quite possibly on the edge of a protracted slide, and so too gold which would weigh heavily on Canada's resource-heavy market, we're expecting the next big move in the TSX will be downward.
Below is the chart for HXD, Horizons BetaPro S&P/TSX 60™ Bear+ ETF which "seeks daily investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to two times (200%) the inverse (opposite) of the daily performance of the S&P/TSX 60™ Index. The Index represents the large cap universe for Canada by offering exposure to 60 of the largest companies on the Toronto Stock Exchange."
The HXD chart shows a year-long declining wedge pattern that looks about to be broken to the upside.
HXD trades in Canada, and if it hits $8.00 we'll buy it.
We'd then close out of the position if it trades below $7.70 pending further updates.
Here's a detailed look at its long-term chart:
The black lines show a downtrend of resistance immediately above its current levels, and an uptrend stretching back to early this year probably already broken.
Of greatest interest is the momentum at the bottom. The red arrows call attention to what happened the last three times when there was a cross in the MACD (Moving Average Convergence Divergence) similar to the one that's happening now (red circle at lower right).
Such indicators are never fool-proof, of course, as evidenced by the green circle at lower left showing a time there was a breakdown in the MACD but the market didn't drop.
With global stock markets quite possibly on the edge of a protracted slide, and so too gold which would weigh heavily on Canada's resource-heavy market, we're expecting the next big move in the TSX will be downward.
Below is the chart for HXD, Horizons BetaPro S&P/TSX 60™ Bear+ ETF which "seeks daily investment results, before fees, expenses, distributions, brokerage commissions and other transaction costs, that endeavour to correspond to two times (200%) the inverse (opposite) of the daily performance of the S&P/TSX 60™ Index. The Index represents the large cap universe for Canada by offering exposure to 60 of the largest companies on the Toronto Stock Exchange."
The HXD chart shows a year-long declining wedge pattern that looks about to be broken to the upside.
HXD trades in Canada, and if it hits $8.00 we'll buy it.
We'd then close out of the position if it trades below $7.70 pending further updates.
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posted by C. Guinness @ 11:03 AM
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