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Canadian Stocks Break Out to All-time Highs

David Becker
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www.iforex.com
Canadian Stocks Break Out to All-time Highs

The Canadian Stock Market ($TSX) had a weekly close in all time high territory for the first time since 2008, and shows that global stocks have now joined the US in the party. This would seem to confirm the breakouts shown above in the commodities. With many of these charts making a seasonal low about now, the Canadian market seems ready to move in a powerful thrust if the $USD continues to weaken and commodities surge.

Momentum on the TSX is strong with the MACD (moving average convergence divergence) index generating a buy signal. This occurs when the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The index moved from negative to positive territory confirming the buy signal. The only caveat is the high level of the RSI (relative strength index), which is printing near 73, which is above the overbought trigger level of 70.

The Shanghai Composite ($SSEC) has been a chart of frustration for almost 5 years. After peaking in July 2009, it continues to sit 40% off the rebound highs from the 2008 lows. The price is coiling above the 2000 level, which was also initial resistance above the 2008 lows. If the commodities can all break out in July, the Shanghai Composite should push higher dramatically as the commodity weakness since 2011 has been duplicated on the Shanghai chart.

Copper had a big week. It soared up and almost broke out through the down sloping trend line. What Copper does over the next few weeks is critical to confirming the uptrend in the commodities $CRB index. Gold and Lumber both broke up through their trend lines this week. $GOLD has been moving for a while now, and lumber surged during the seasonal lows of June.

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