What's going on in the stock market?
The stock market is, if nothing else, an interesting study in what is or isn't going on?
The market averages are on component in the analysis of the market. The other, and usually most significant, is the action in leading stocks. Describing leading stocks as a "mixed bag" may not be a technical term but it isn't particularly informative either. There are plenty of stocks working, but the reality of executing a buy and selling with a profit is troublesome.
In depth analysis of the markets involves a number of studies looking at different groups of behaviours. The behaviours looks like a list of stocks such as break outs, big gainers, stocks in up trends, etc. For investors who like to roll up their sleeves and analyze the market use our studies as a benchmark.
For now, we'll take the first and simpler step of stock market analysis by looking at the market averages. See below.
The Canadian stock market may appear to be in better condition than the U.S. but a pivotal development is coming. You can see from the price chart, the advance has been strong but even strong short and intermediate term cycles stall. Following the huge decline in the Canadian market a reckoning is coming. Underlying the TSX is the trend in commodities. While precious metals and energy have pushed the TSX higher, other commodities have deteriorated over the past month.
In the U.S. a range bound trend continues following a powerful and long bull market run. Without a catalyst for more upside, the trend will likely continue.
TSX facing test
Range bound U.S. stock market
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