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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

Dots

...If the dots don't connect, gather more dots until they do...or, just follow the $$$...

Late Summer

Late Summer

Events

UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Wed. Sept. 26 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET ~ Fed Chair Press Conference
* Fri. Oct. 5 @ 8:30 am ET ~ Employment Data
* Mon. Oct. 8 ~ Canadian markets closed for Thanksgiving Day Holiday
* Thurs. Oct. 11 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Wed. Oct. 17 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Wed. Oct. 24 @ 2:00 pm ET ~ Beige Book Report
* Tues. Nov. 6 ~ U.S. Midterm Elections
* Thurs. Nov. 8 @ 2:00 pm ET ~ FOMC Announcement
* Thurs. Nov. 22 ~ U.S. markets closed for Thanksgiving Day Holiday & NYSE closes early @ 1:00 pm on Fri. Nov. 23
* Wed. Dec. 19 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET ~ Fed Chair Press Conference
* Tues. & Wed. Dec. 25 & 26 ~ Canadian markets closed for Christmas & Boxing Day Holidays
* Tues. Dec. 25 ~ U.S. markets closed for Christmas Day Holiday & close early @ 1:00 pm on Mon. Dec. 24
*** Click here for link to Economic Calendars for all upcoming events

IMPORTANT BLOG POST UPDATES...
* Trade Wars have escalated and now include diplomatic wars PLUS President Trump is cannibalizing prior U.S. market gains with his tariff tantrums against its world trading partners, while destabilizing a delicate world market balance

Friday, March 02, 2018

Canada's TSX: Isolated

The monthly chart below of Canada's TSX Composite Index (TSX) shows that price has become isolated outside of several long-term intersecting trendlines and is caught up within an expanding triangle formation that began forming in December 2016 (right after the U.S. Presidential election).

Expanding triangle formations typically represent trendless, volatile periods of consolidation and this type of range trading will continue until price either breaks and holds above or below this triangle. I've no reason to doubt that this will be the case here...particularly, in view of the following.

Canadian Prime Minister Trudeau's recently-released 2018 budget is, in my opinion, a weak political budget, not a strong economic budget. There does not appear to be any kind of "backstop" fiscal measure/proposal to prevent or minimize economic headwinds/shocks that may arise from global or domestic pressures/issues, as well as current influences such as a wildly fluctuating Canadian dollar, wildly fluctuating commodity prices, rising global and domestic inflation, tightening Central Bank monetary policies, rising interest rates, high personal debt, anaemic wage growth, a weakening Canadian GDP (2017 Q4 GDP was 1.7%, below 2% estimates, and 2018 Q1 is not anticipated to be strong), etc.

Further headwinds are the current NAFTA negotiations that have been underway with the U.S. for some time now. After seven trade meetings, it's still unresolved and is in danger of being scrapped by President Trump. As well, Canada will be slapped with additional 25% steel and 10% aluminum tariffs, as has been proposed by him this week.

To enact such a weak budget during such volatile and chaotic times and think you can rely solely on monetary policy to protect in times of further stress, is willfully irresponsible and naive, especially when you're attempting to negotiate with your largest trading partner who is bent on implementing a protectionist (and very unpredictable) agenda to the detriment of other countries, including your own. You will, no doubt, be seen as a weak leader who is reactionary, as opposed to one who is perceived to be strong, proactive and prepared.

This budget panders to the political interests of a variety of special interest groups in preparation for the Canadian federal election (October 21, 2019) and recklessly ignores the above economic pressures/stresses...not a good signal for Canadians, such as myself, to consider at the voting booth. As such, we may see the TSX continue to trade within this expanding triangle formation until the election.